Looking into trading?
If you’ve managed to gather together a few pennies (or dollars) with which to invest, the days when you could stick it into a bank account and then get fat off the interest are a thing of the past. These days banks are more interested in getting money off you than giving you the stuff. Interest rates have hit rock bottom and there seems no miraculous recovery in sight.
So if you want to invest in a way that’s likely to actually see you attain some gains, then it’s going to have to be done via trading. Of course with trading, there’s always the risk your carefully considered investment could dwindle to zilch within a couple of days, but as the old saying goes, “nothing ventured, nothing gained.”
The surest way of losing your crucial funds when you become a trader is to not do your homework, or to send your money off to some two-bit online trader who promises (after commission) to quadruple your investment with a week and turn $1,000 into $1,000,000 within a year. You need to be dealing with reputable firms with reputable reputations who can boast a successful portfolio and experience that goes back years.
Here then are the top ten online stock trader sites that are out there.
Fidelity hits the number one spot in our list due to its excellent reputation and the expertise of its staff. As well as its online operation, Fidelity has over one hundred trading offices across the US, so if you’d prefer to talk to a real person before you hand over your investment funds, then you are quite welcome to do so. Fidelity’s range of screening tools are a distinct advantage to the newcomer, and they will help you screen stocks and options, and set up alerts that’ll inform you when your stock has reached the level you’ve decided at which you will sell or buy in further.
A San Francisco brokerage and banking company, Charles Schwab set up his corporation in 1971 as a traditional brokerage firm and an investment newsletter publisher. The company now has net profits of over 75 billion dollars. If you are a new trader, you will be impressed with the quality of service and the level of advice that is on offer here. Of course, trading companies make their money, or at least some of it, by charging investors to make trades, but with Schwab those fees were perfectly reasonable.
Scottrade have been playing around in the investments business since 1980 and, with an annual revenue around the billion dollars mark, you’d have to assume they know what they are doing. You can open an account with Scotrade with as little as $500, and their trading charges are very reasonable – just $7 a transaction if performed online, for stocks, options or funds. If you want to learn about investing before taking the plunge, Scottrade offers webinars and in-person seminars to help you do just that.
E*Trade are a specialist online discount trading service who also offer separate banking services, including checking accounts and credit cards. They are also one of the longest running online trading clients, having been around since 1991, when they offered their trading services via AOL and Compuserve. It now has assets approaching $50 billion. E*Trade is a platform for both serious and regular traders. Their fees are a little higher than some, but for that you are guaranteed exceptional services and expert advice.
The Vanguard Group are a US-based company who manage investments to the staggering tune of two trillion dollars. They were founded in Pennsylvania in 1975, and cater almost exclusively for people who have spectacular amounts of money to invest, and as such are not really suitable for the casual or starting investor. If you are lucky enough to have a sizable sum to invest then you will find the skilled advice you’ll receive at Vanguard to be invaluable.
A Nebraska-based online broker that has grown considerably since its beginnings in 1996, when it introduced “Accutrade for Windows”, the very first online investing tool. It is now one of the top 1,000 firms in the US and has an annual net income approaching half a billion dollars. Their fees for online transactions are $9.99 for stocks, options and bonds. They have a variety of software options as well – from web browser-based, down-loadable applications and even mobile apps.
Sharebuilder is the online trading branch of ING Direct, America’s most popular online bank. The site is primarily aimed for the casual investor, or those who are completely new to the world of investing; their fees are very attractive as well, at $9.95 per trade with a $10 addition if you want the advice of a broker.
Interactive Brokers LLC sells itself as “The Professional’s Gateway to the World’s Markets”, and has an annual revenue around the one billion dollars mark. It is definitely the least expensive option on this list, and has held the place as the lowest cost broker for the last five years. Despite this, their pricing structure can seem a little complex, so this is probably not the best option for new investors.
The most invaluable aspect of this site is a virtual trading environment that gives you all the advantages of the tools that are available here, yet by using virtual money, you can get used to trading without risking any of your own capital. The downside of this is – if you make a killing, you won’t be able to spend it! OptionsXpress really is recommended if you’ve not dealt in online trading before.
A broker-dealer based in Chicago, Options House can boast some of the lowest commissions that exist online, starting at $4.95 for a stock trade. Options House hopes to appeal to experienced traders, and as such is not really an option for brand new investors.