Best Online Stock Trading Companies

The stock exchange has been carried out for many years. It involves a broker who will execute the trade. This is followed by capital to purchase the investment, and then a general notion is needed on what to purchase and invest on. A trading platform is needed to carry out the act of buying and selling stocks. With the advent of the internet and technology, the best online stock trading companies are readily accessible.  

Self-driven investors can make use of this service. The automated investing service is available at an adequate rate, especially for those that are commission-free. It is highly user-friendly as well. 

Financial advisors provide good services in addition to offering advice. However, it can be very expensive. Therefore, using online stock trading companies is more useful. This article discusses stock trading in depth along with five of the best online trading companies in parallel with their advantages and disadvantages. This article will make it easier for beginners to make a decision before trading.

Steps to Carry Out the Stock Trading Process Online 

To carry out the trading process in the best online stock trading companies: First, the investor must select a stock trading online website that best suits his needs. The website would prompt the user to sign up. The user is then required to enter his/her home or work address, contact number, driver’s license or any other ID, funding method, and social security number or social insurance number. 

Every company offers variable fees, but some platforms offer the services for free or with minimum fees. The investors must research and have a clear knowledge of the basics of stock trade along with their jargon and terminologies. 

While it can be difficult to keep tabs on the livestock market, alternate features are available for this purpose. They can be of various types such as Normal, Limit Order, Cover Order (CO), Stop loss (SL), Margin Intraday Square up (MIS), and Bracket Order (BO).

Step # 1: Choosing the Right Broker

A broker refers to a trading platform that may be a website or a person that allows the selling and buying of stocks and exchange-traded funds (ETFs). The broker is used to create a brokerage account. It is used to keep money and investments. The term is also referred to as “brokerage,” which is referred to as a business that employs brokers to enable trading.

To make a decision regarding brokers, the reputation, fees, software, and brokerage must be thoroughly studied and researched. When choosing a broker, customer services must also be taken into account. It should be checked if they provide live support 24/7 through live chat or telephone. Some brokers are less interactive; for example, they communicate through email, newsletters, text messages, and text chats.

Step # 2: Purchasing Stock Without a Broker

Direct Stock Purchase Plans (DSPP) are available for purchasing stock with companies directly. Usually, it is possible to conduct trade with a broke as brokerage accounts are available and can be opened online instantly on the best online stock trading companies. Some offer commission-free trading as well. 

Investment in stock trading can be conducted at any time. The simplest and cheapest method to buy the stock is through an online discount brokerage. The websites imposing fees will follow a flat per trade commission policy. On any stock purchase, the fees will be in the range of $5-$10 per online trade. For investors with low initial capital, investors must open an account on a service provider offering minimum investment.

Step # 3: Reducing Risks

Risk is associated with investing in stocks despite a handsome wage being given to the investors. To reduce these risks, diversification needs to be taken into account. Investing in a variety and a large range of different sectors of the economy can reduce the drastic loss associated with risks of unsuccessful businesses. 

If one sector fails, the overall stock loss will not be drastic. For example, if a loss is experienced in the Amazon investment, then the overall loss will not be affected as it only contributed to a small fraction of the overall stock. 

For a good amount of exposure, a combination of investment in domestic and international low-cost ETFs (exchange-traded funds) is necessary. Investors can then keep track of all the stock of the country.

To make the most profit, holding on to the stock for a long period of time is a good option. This time is referred to as “the time horizon.” Most investors will traditionally use investment accounts with high-interest savings or government bonds to keep their money. 

According to a study, keeping the stock for more than 10 years was found to be highly fruitful in the long run.

Additionally, it is important to survey and find the best online stock trading companies. Narrowing down options and researching their features will enable the investor to make the best decision.

Step # 4: Purchasing a Fraction of the Stock

Amazon and Alphabet are some of the most popular stocks for technology. But it is quite expensive. The price per share may be $1,000 or more. Exchange-traded funds (EFT) are the best mode for purchasing a fraction of a stock. These are investments from various stocks. They can vary from real state to bonds. Simply purchasing a unit is equivalent to purchasing a share of the company.

The 5% rule is followed in the best online stock trading companies. It states that to enable diversification, the investment in each economic sector should not exceed 5% of the total investment portfolio. In the case of EFTs, investments of more than 5% can be made on a single EFT as they are a combination of multiple stocks and sectors.

Step # 5: Methods to Choose the Correct Stock

There are two ways to do so. First, investors must look into a company that exceeds its performance. In other words, it exceeds the market’s expectations. The other method is “Equity Risk Premium” (ERP). This is the percentage over the interest rate received by placing money in government bonds that are unaffected by risks or the risk-free rate. The risker the investment, the greater is the reward.

For those with less capital, investing in normal or stop-less orders is an ideal option. Trading stock derivatives must be avoided as it comprises of future options. Additionally, they are based on contract and hence they may expire after a certain period of time. 

The Five Best Online Stock Trading Companies

The definitive list of the five best online trading companies is stated below, along with their ratings, fees, pros, and cons.


Rating: 5/5

Account Minimum: $0

Fees: $0 stock trades and EFT trades. $0.65 per contract and $0 to $49.95 for mutual funds.

It tops the list of best online stock trading companies as it provides no commission. Its mobile app is of extremely high quality that suits both beginners as well as trained investors. It is ideal for investors who want to cut costs for routine stock, ETF, and mutual fund trades.


  • A fractional share investing feature is offered.
  • Many options of mutual funds.
  • Good quality mobile applications.


  • High contract fees.
  • Online chat is available only at particular times of the day.
  1. SoFi Active Investing

Rating: 4.5/5

Account Minimum: $0

Fees: $0 per trade, promotion of $5 to $1,000 in free stock. $75 partial or full outgoing transfer fee.

This is one of the best online stock trading companies that is directed towards young investors. It provides free trades of stocks and exchange-traded funds. It allows the trading and buying of around 20 cryptocurrencies, including Bitcoin and Ethereum. It offers fractional shares of companies like Amazon and Netflix.


  • No commission fee in stock and ETF trades.
  • It has cryptocurrency trading features.
  • Fractional shares are provided.
  • It provides free financial counseling.


  • Only a small selection of tradable securities is available.
  • Limited track record.
  1. TD Ameritrade

Rating: 4.4/5

Account Minimum: $0

Fees: Free stock and ETF. $0.65 per options contract.

It is the biggest online broker and is ideal for beginner investors who want to receive investor education. It is active online and tends to target a younger audience. Their website offers expanded learning pathways for all types varying from beginner level to advanced level. 

A free trial is offered to test the service without making any deposits before committing fully to the service. It focuses on attracting new investors who want to gain skills and confidence to secure their future in the financial aspect.


  • Teaches basic investing concepts to beginners and moves on to more advanced methods with time.
  • In-person education is offered at around 280 offices.
  • Numerous training methods both on the mobile app as well as their website are available.
  • Live programming for over 9 hours.
  • User-friendly mobile application for younger audiences.


  • Multiple platforms may need to be utilized for specific tools.
  • This, in turn, affects experienced investors who utilize the feature of fundamental and technical analysis.
  • A wide range of account types is available, which makes it difficult to choose the correct one that suits the investor’s need.
  • A small interest of around 0.01-0.05% is paid on money that has not yet been invested.
  1. E*TRADE

Rating: 4.2/5

Account Minimum: $0

Fees: 0 commission for stock and ETF trades. Options vary from $0.50 to $0.65 per contract.

E*TRADE tops in the list of the best online stock trading companies. It is ideal for ease of online trading experience for investors. It offers three computer-based and two application-based platforms on mobiles in order to conduct trading activities. It has also been renovated to suit fresh investors. 

It provides access to screening tools, education offerings, and portfolio analysis. The mobile apps are categorized into two types, namely: regular E*TRADE and E*TRADE Pro. A free trial account is provided in the shape of a paper trading platform for practice purposes. The advanced platforms are designed to navigate the investors in complex situations and assets.


  • The mobile apps are user-friendly that have been widely tested.
  • Its paper trading capability is used to test various strategies. 
  • It makes use of delayed data.
  • It offers fast navigation to the market.
  • Various markets are divided according to their risk levels, namely: conservative, moderate, and aggressive. They consist of ETFs costing $2,500 minimum and mutual funds costing $500 minimum.
  • No additional fees apart from fund management costs.


  • It has a tiered commission schedule. E*TRADE charges $0.65 per contract for irregular traders and $0.50 for traders placing 30 options trades per quarter.
  • It does not provide direct access to international markets or the chance to trade foreign currencies.
  • Consolidation of externally-held finances cannot be done to show overall net worth.
  1. Merrill Edge

Rating: 3.6/5

Account Minimum: $0

Fees: $0 per stock trade. $0 per leg plus $0.65 per contract.

It is the best in terms of customer service. In-person meetings with advisors can be arranged at the Bank of America branches nationwide. They focus on the planning of different life stages. It has two computer-based trading platforms and two mobile applications. A story feature is available that lets the user understand the changes in his/her portfolio as well as the factors affecting stocks and funds. It offers support through telephone and online chat. Technical assistance is available round the clock. 


  • Its portfolio analysis tool allows the user to look at the working of their assets in depth.
  • Accounts from different financial institutions can be imported.
  • It offers third-party research capabilities.
  • $100,000 in qualifying assets possessed by clients are given additional benefits to save money.


  • The per-contract options fees and margin interest rates are comparatively high.
  • Options spreads are only two legs. 
  • More complex spreads can be traded by contacting live brokers.
  • No trade of futures options or cryptocurrencies. 

The Final Analysis

As it can be noted, there are many chances of earning money in the buying and selling process involved in stock trading. Brokers provide multiple options for investment. 

This article details the advantages of investing in stock trading and the various methods to do so. The methods to reduce risks and maximize profits are also discussed in detail. 

The five best online stock trading companies are also discussed in this article. Their features, ratings, fees, pros, and cons are detailed and analyzed. 


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