How to Compare Online Trading Companies
Online trading companies, or discount brokers, allow you to trade stocks and other investments online. Before choosing a discount broker to use for trades of stocks, bonds, mutual funds or other securities, review the investments offered, the fees and commissions charged, as well as the online tools designed to help you.
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Types of Investments
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Determine what investments you want to trade. More than a half-dozen online discount brokers permit you to trade stocks, stock options, mutual funds and exchange-traded funds, or ETFs. In addition, some brokers offer individual retirement accounts, or IRAs. Beyond these basic products, some brokers also offer international stock-trading capability.
Commissions and Fees
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Consider how much you'll pay for your account and trades. Discount brokers typically charge commissions in the range of $4 to $9.99 per stock trade you execute yourself online. Some reduce the commission per trade if you make automatic monthly trades. If you call for assistance with a trade, fees may rise. And if your goals include opening IRAs, determine if there are any custodial fees associated with managing IRA accounts.
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Trading Tools
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Research website ease-of-use, which includes tools to help you research your stock picks. Discount brokers maintain calculators, charts and graphs with historical stock data, press releases with the latest company news, and education centers. Some online brokers also offer blogs and forums through which you may discuss investing ideas with others.
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