Trying to beat the market is as thrilling and addictive as gambling but without the social stigma. With the coming of age of online trading, anybody with a computer, a bit of cash, and a reasonably good financial history can start investing.
These stock trading platforms make online stock trading a breeze and provide the tools you need to make educated guesses on market behavior.
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The best stock trading platform around doesn’t make it on most lists, but that doesn’t make it any less awesome.
Vanguard manages nearly $3 trillion in assets and has the largest mutual fund in the world, Vanguard’s Total Stock Market Index. If you’re smart you’ll open an account with Vanguard and buy as much as you can afford in its S&P 500 index fund.
That, at least, is the investment tip Warren Buffet gave his wife in his will. If index funds are too boring for you, Vanguard also provides all the investment options, research tools and educational material you expect from a top stock trading program, plus you get Vanguard’s ultra-low trading rates and commission-free trades on Vanguard’s low-cost ETFs.
Sogotrade is a great trading platform for newbies because it’s cheap but still provides all the research tools you are ever likely to need.
The standard fee for a trade is $5, but if you make 50 or more trades a month, the fee drops to $3. Using their comprehensive investor education tools, however, is completely free. Their podcast on options is a must see, if you’re new to options trading.
Scottrade is the choice for users looking for the best support and customer service in the industry.
It’s trading fees are low ($7 a trade) and there are no account maintenance fees to worry about. It does take $2,500 to open an account, but you get access to high quality trading educational material and you will be able to contact your broker by email, phone, or even visit one of their offices.
At $9.95 a trade, OptionXpress may seem at first glance to be one of the most expensive stock trading platforms around. However, when you consider that price allows you to trade with the assistance of a professional broker at no extra cost, it starts to look like a bargain.
The same service with Scottrade and Ameritrade will cost you $27 and $44.99 a trade, respectively. OxptionXpress is also one of the few platforms that provide a virtual trading account where you can practice and test your trading strategies with virtual money.
OptionsHouse does not provide quite as many investment options as OptionsXpress, it may provide the best bang for your buck, particularly if you’re looking into option trades.
OptionsHouse also does not offer education savings plans and you can’t invest in international stock exchanges but it manages to provide broker assisted trades for only $4.75 a pop and allows you to borrow from your broker in order to buy on margin for rates as low as 1.5% above the base rate.
TradeKing is a middle of the road option that will satisfy frugal traders who want all the main investment options but don’t want to pay full price.
Stock trades, limit trades, and option trades are all priced at a flat fee of $4.95. The catch is that if there is no activity in your account for a year and your balance falls below $2,500, you will have to pay $50.
7. TD Ameritrade
TD Ameritrade manages to combine an impressive array of investment options and trading tools with a simple and intuitive platform.
The company has an excellent reputation in the industry, has been in business since 1975, and is widely used by the some of the biggest investment companies in the world. Although the fee per trade is the highest in our list, $9.99, there is no minimum opening deposit; margin rates start at only 1.25% above the base rate; and you have access to all the big boys research tools (level I and level II quotes) at no extra cost.
8. Charles Schwab
With over 40 years experience in the banking business, Charles Schwab, as with Ameritrade, Fidelity and Vanguard, is one of those companies that commands respect and trust to investors.
Charles Schwab manages over $1.95 trillion in assets, more than the entire national budget of many countries, and 8.8 million active brokerage accounts, which is more than the population of many countries. Stock trades cost $8.95 a go and there is a $1,000 minimum to open an account, but there are no fees for maintaining or opening an account.
TradeMONSTER is an up-and-coming platform that is getting attention from big names in the industry.
Barron’s, for instance, has rated it as the best platform for option traders for four years in a row. You need $2,000 to open an account, but stock trades only cost $4.95, option contract fees are just $0.50, and there are no account maintenance fees. Although probably not the best option for newbies, TradeMONSTER combines powerful research and investment tools with wholesale prices, which probably makes it the most economical option for experienced investors.
Although last in our list, E*Trade is by no means the worst. In fact, it’s up there in the top 5 with Ameritrade, Vanguard, Schwab and Scottrade for the all-around best stock trading platform title.
E*Trade offers you access to every investment option under the sun, as well as being the program to beat when it comes to best trader resources and mobile trading capability.
Where it doesn’t do so well is in the fees department, but that is the price you pay for top of the line investment tools and resources. There is a $500 minimum to open an account and every stock and options trade costs $9.99. Margin rates vary from 4.14% to 8.14% above the base rate depending on the size of the trade.
If you’re set on becoming your own stock market trader any of these stock trading programs make it easy to get started. There is, however, a huge caveat you should consider. Most private traders lose money and the desire to beat the market can become a soul-crushing addiction that is hard to give up. Chasing the dragon of stock trading has destroyed livelihoods and relationships. You could be the next Warren Buffet, but you’re more likely to win the lottery and be hit by lightning on the same day.
By all means enjoy the game, but only invest what you’re ready to lose. Don’t trick yourself into believing you can either consistently beat the market or out-think professional investment companies and hedge funds with their multi-million dollar research budgets and backdoor connections, regardless how good your trading software is.