As more and more brokers come to offer trading in individual stocks, our experts have selected the best 100 and then assessed them all in terms of the scope of their respective offerings. Then we narrowed the list down to the best 5 online stock trading brokers, which we present to you here.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- FP Markets, ECN trading with leverage up to 1:500.
- Eightcap, Competitive pricing + excellent daily videos.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFXTM was founded in 2011 and is headquartered in the U.K., Cyprus, and Mauritius. It enjoys a very high level of regulation including by the regulatory authorities of both the U.K. and the European Union, so trader can feel like they enjoy a high level of security here. FXTM offers trading in Forex, commodities, equity indices, and of course individual stocks and shares. FXTM offer online stock broking for the top American shares in two different formats: a wide selection of over 120 stocks can be traded as certificates for deposit (CFDs), while 10 stocks can be bought and sold directly without any wrapping of legal ownership. Leverage as high as 10 to 1 is offered.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- No cryptocurrencies and limited choice of commodities
FP Markets
In Summary ECN trading with leverage up to 1:500FP Markets, based in Australia, is one of the world’s most popular forex & CFD brokers. FPMarkets offers the MetaTrader 4 (MT4) as well as the MetaTrader 5 (MT5) trading platforms, alongside WebTrader and IRESS platforms, low forex fees and fast transaction turnarounds. In addition, clients can enjoy trading in over 10,000 different shares and stocks, as well as over 60 forex pairs and crosses, 5 cryptocurrencies, 11 equity indices, all of the major commodities, and a number of top publicly traded shares traded on both the Sydney and the Hong Kong stock exchanges. FPMarkets features multiple licensing through top regulators including the Australian Securities and Investments Commission (ASIC) as well as the Cyprus Securities and Exchange Commission (CySEC).
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
Eightcap
In Summary Competitive pricing + excellent daily videosTop stockbrokers maintain a wide range of assets, covering various sectors and geographic locations. Eightcap ensures stock traders get a well-balanced asset selection, offering stock CFDs on the MT5 platform, which fully supports algorithmic and copy trading. Capitalise AI provides traders with a code-free environment to automatize trading strategies, and Eightcap connects to the TradingView community, one of the most active ones with 30M+ traders.
Eightcap offers long and short positions on blue chip stocks in the US, Australia, London, and Germany. Premium liquidity ensures tight spreads order execution at the specified price or better, which improves overall profitability.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade, founded in 2006, is one of the true pioneers in the online brokerage space. AvaTrade allows trading in over 100 different stocks and shares listed on the NYSE, NASDAQ, FTSE, and certain other major exchanges. The stocks are traded wrapped as CFDs. Leverage of up to 20 to 1 is offered on stock trading. AvaTrade’s stock trading fees are low. Stocks offered are essentially focused on major market listings in traditional stock markets of interest such as the U.K. and U.S.A. but crucially, a wide enough selection is offered to ensure a reasonable level of diversification can be secured when required by the trader. AvaTrade has excellent trading tools, including an easy-to-use mobile trading app.
Pros & Cons
- High-quality educational offering via SharpTrader
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
Best Stock Brokers Comparison
| | | | | |
Regulators | CMA, CySEC, FCA, FSC Mauritius, FSCA | ASIC, CySEC, FSCA | ASIC, CySEC, FCA, SCB | FMA, FSA | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID |
Year Established | 2011 | 2005 | 2009 | 2014 | 2006 |
Execution Type(s) | ECN/STP, Market Maker | ECN/STP | ECN/STP, Market Maker | ECN/STP, No Dealing Desk | Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.1 pips | 1.1 pips | 1.0 pips | 1.3 pips | 0.9 pips |
Average Trading Cost GBP/USD | 0.2 pips | 1.4 pips | 1.2 pips | 2.0 pips | 1.5 pips |
Average Trading Cost Gold | $0.18 | $0.21 | $0.12 | $0.90 | $0.29 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Trading View | MetaTrader 4, MetaTrader 5, Trading View | Other, MetaTrader 4, MetaTrader 5, Web-based+ |
Islamic Account | |||||
Negative Balance Protection | |||||
| Visit Website | Visit Website | Visit Website | Visit Website | Visit Website |
11 Tips to Consider When Choosing an Online Stockbroker
- Account Security, i.e. the security of your deposit judged on the regulatory position and reputation of the stockbroker. You need to be sure you will get your money back if and when you ask for it.
- Trading Fees (spreads, commissions) are not the only determining factor you should consider when choosing an online stock trading broker, but you should not be paying more than the industry average unless you are getting access to some service which gives you a special benefit.
- Choice of stocks and shares to trade.
- Account minimums – some brokers will not let you open an account without a minimum cash deposit. Can you afford the minimum deposit required by your first-choice stockbroker?
- Other fees, such as overnight financing, inactivity fees, and withdrawal fees which may be charged. These are always worth checking.
- Speed of order execution
- Market research (not usually very important)
- Customer service
- Free trading tools
- Retirement / investment account options (tax compliant)
- Banking options
Top Features of the Best Stockbrokers for Beginners
In many ways, the best online stock trading brokers for beginners are the same as the best for everyone else – safety, regulation, and the cost of trading being basically the same for all clients. However, there are a few special issues which beginners would be wise to consider when choosing a broker:
- Low fees / cost of trading may be especially helpful to beginners, as beginners usually need as much help to profit as possible. Beginners also tend to overtrade which can increase overall costs.
- Does the broker offer truly good education and market research, or just a gimmick packaged to look like it?
- Easy, intuitive trading platform.
- Consistently reliable execution is more important than average execution speed.
Daily Forex’s Expert Recommendation for Advanced Traders
Advanced traders will probably be trading larger accounts and are likely to be trading in higher volumes too. More experienced traders will also probably be more interested in trading a wider variety of stocks and can benefit from the provision of advanced trading tools.
For these reasons, we think Plus500 is the most suitable broker for advanced traders looking for an online stock trading broker.
What is a Stockbroker?
A stockbroker is a business which sells and buys stock, or some instrument tied to the value of a stock, to its clients. Online stock trading brokers are a bit unique as they are effectively obliged to return the other side of any transaction initiated by a client once it has begun. This means that if you buy a stock from an online brokerage, they are obliged to let you sell it back to them, and if you sell a stock short, they are obliged to let you buy it back. The timing is up to the client, although online brokers are usually only open for trading in individual stocks during the hours the relevant stock exchanges are open.
Stockbrokers traditionally make their profit from spreads (small differences between the buy and sell price which tend to persist) and/or commissions. However, online retail stockbrokers may also profit from their client’s trading losses when they make the relevant market instead of acting as an exchange or intermediary.
How Much Money Do You Need to Start Investing?
When it comes to how much money you need to start trading with online stock trading brokers, there are two issues to consider.
Firstly, most stockbrokers have a minimum deposit requirement, so you are going to need at least that amount of money to start investing – mind the minimum deposit requirement. Secondly, ask yourself how much do you need to trade stocks successfully given the anticipated win rate of your trading strategy, as well as the minimum position size and margin requirements imposed by your stockbroker of choice?
For example, if you accept that you might have 20 losing trades in a row as a worst-case losing streak, and the minimum trade size accepted by your broker is $50, and you use maximum leverage at 20 to 1, and you will on average lose $20 per losing trade, you will need to plan for a potential loss of $400 (twenty times $20 stake per trade). If you want to aim for a worst-case maximum drawdown of 20%, then you will need to multiply that $400 by five to determine your overall starting account size.
Simply put, it is important to work out your worst-case scenario, decide the biggest account drawdown you are prepared to accept, and then apply that to the terms your broker imposes. It is a good idea when choosing an online stock trading broker to apply this data to each potential broker you are considering, as you will then see which broker is best suited to the amount of money you have available to deposit.
What Is an Online Brokerage Account and How Does it Work?
An online brokerage account is similar to a bank account, but its sole purpose is for trading and investing rather than day to day expenditure. Clients will open a brokerage account, verify their identity, and fund it with one of the supported payment solutions, which include bank wires and credit/debit cards.
The online brokerage account displays overall portfolio holdings and floating profits/losses related to open positions and allows investors to manage their investment activity. It also reflects all dividend payments and other corporate actions from their investments, like stock splits, mergers, acquisitions, and bankruptcies of the portfolio companies. Investors can transfer cash not used for open positions from their online brokerage account to their bank to use without restrictions.
Do Brokers Offer Mobile Platforms?
Almost all brokers offer mobile trading platforms. Most are from popular trading platform providers, like MT4, MT5, and cTrader, but some of the best stock trading brokers have developed their own proprietary mobile apps. They are ideal for copy trading strategies and managing portfolios on the go, but investors should consider their sole use as a sub-standard solution to conduct in-depth analytics when compared with desktop versions of the trading platform that include far more tools and information.
Usually, traditional stockbrokers only cater to manual traders, point and click type execution and are best therefore used for long term fundamental investment strategies, reading reports, research, and analytics. Mobile apps cater more to traders than investors and are widely available, allowing investors to buy and sell shares and track account values similar to their desktop or web-based counterparts.
Can I Buy Stocks Without a Broker?
Yes, investors can buy stocks without a broker, but the practice is increasingly rare and may soon become a relic of the financial system. Some publicly listed companies have direct stock purchase plans, allowing potential investors to purchase shares directly from the company. They were more common before the emergence of online brokers lowered the transaction costs. It allowed investors to save avoid commissions levied by bricks-and-mortar brokers and bank-brokers but has become mostly obsolete today.
Investors can contact companies and inquire about direct stock purchase plans, but many existing today are for employees only. Companies administer them according to internal rules. In rare cases, an investor may sell physical stock certificates in person to another investor, but the process is inefficient (you may have to pay local taxes too) and often costs more than buying shares with one of the best stock trading brokers.
The Difference Between Investing and Trading
The primary difference between investing and trading is that the former aims to generate wealth slowly over time, while the latter focuses on short-term profit generation. Investing in stocks can be an ideal approach for retirement purposes or passive income via dividend payments. Trading can benefit from the use of leverage if traders use it with prudent risk management. Most consider investing less risky than trading as it requires ‘lower touch’ management.
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