How to Choose the Best Company for Online Stock Trading
Investors who are comfortable making their own investment trades and choosing their own stocks can save a lot of money by using an online discount broker instead of a full service firm. But not all online firms are the same, and the firm that is right for one investor might not be the best choice for the next. Choosing the right online stock trading firm means looking at your own circumstances and what is most important to you as a trader.
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Instructions
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Check the required minimum account size for each online stock trading firm you are considering. Whittle your list down to those firms whose minimums you can meet.
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Review the account maintenance fees charged by each firm. Some firms charge an annual account maintenance fee to help defray their costs, although that fee might be waived for high value accounts.
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Compare the cost of trading at each of the online brokers under consideration. Check the costs for market orders, limit orders, option orders and other types of trades. Focus on the cost of the trades you expect to make most often and choose the firm with the lowest cost per trade.
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Log on to each company's website to see if the firm maintains a physical location near you. Some online brokers have brick and mortar offices throughout the country where clients can stop in and discuss their investment needs. Look for a firm with a local branch if this type of support is important to you.
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Check the availability of free trades for exchange-traded funds if you plan to use ETFs in your portfolio. ETFs work much like mutual funds, in that they represent ownership of many different companies. But ETFs trade like stocks and can be bought and sold during the trading day. Some brokerage firms offer commission-free trades for ETFs, which lowers the overall cost of trading.
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References
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