Investors and stock traders are always eager to know which stock broker is best for them for online stock trading. Brokerage firms’ fitness with clients demand can be varied. What is a good online brokerage for active trader, may not be a good brokerage for 401k investors. Again some online brokerage firms could be very good fit for day traders or High Frequency traders, while those broker dealer could be unsuitable for position trader. Some investors try to take advantage of big volume of trading and targeting minimum profit while other investors could look for small volume of transactions of shares while holding the position long time. For first group of stock traders brokerage fee is key concern while second group of stock traders look for security and safety of his invested funds.
Important factors for best online brokerage ranking:
Stock Broker Reputation:
Reputation is number 1 critical factor for online brokers ranking. People wants to feel their investment is safe before any investment decision. Without strong faith to stock broker, no one will open account with that brokerage firms. Charles Schwab, TD Ameritrade, Fidelity are ranked higher on this category. Especially Charles Schwab astonishing $2.51 trillion and Fidelity $1.56 trillion client assets clearly indicate their reputation to the American household names.
Brokerage Firms Fee:
Brokerage fee is 2nd critical factor considered for ranking. Even though this is true that clients consider brokerage firms reputation to open account, Volume trader, HFT, Day traders give more priority to the brokerage fee than other factors. At the end of day brokerage fee is something that every investors has to consider. Sometimes stock trader overall position is negative, even though he made money from stock trading because of high brokerage fee. Interactive Brokers, Lighspeed Trading, Trade Station offer very good bargain for brokerage fees. Interactive brokers fees is $.005 per share and light speed trading charges $.006 per share.
Easiness of Platform
Our third factor for best online stock broker ranking user friendlyness of platform. Since Most of the clients of the brokerage firms are not professional traders and investors, clients have very few knowledge about trading jargon and their functionality. Misuse of any function could trigger an unintended trade and might lead to a huge financial loss for clients. Brokerage should make sure clients has deep knowledge about the trading platform before any trade initiated.
Research is another important factors for best stock trading site ranking. Since most of the people do not have enough time to research for right stock. Brokerage firms that offer research for the clients, help clients buy stock online and make decision promptly. This reduce clients research time and stress. Fidelity is ranked one on this criteria because of their versatile research offerings.
Customer service is important for clients. Clients want to make sure they can speak with the brokerage firms and will get proper support from stock broker if they faced any problems with the brokerage accounts and trade execution.
Trade execution is very important for short term trading. In other words, time is money in short term trade. If a trade execute just one second late, that could be a huge loss for stock trading. Faster Execution and clearance is another important factor in our online stock trading broker dealer ranking criteria.
Online Brokerage Firm Account Minimum Requirement:
Minimum deposit is another factors for online stock trading. Lower the minimum deposit requirement, better for the clients. Some online brokers require no deposit and some brokerage firms require deposit as high as $10000. High account deposit requirement acts as a barrier for novice traders and investors in the stock market. There is a tradeoff between high deposit requirment and online brokerage fees and commission. Usually low commission comes with high deposit requirement and vice versa.
Option trading is another point that is also important for stockbroker ranking. Now days lot of traders and investors use options for short term trading and risk management. One advantage with option trading is that Stock trader can calculate his risk and reward before enter into stock trading using advanced option trading strategy. Another advantage with option is you need less capital to trade option with high reward. Some online brokerage firms has advanced option trading platform that offer traders simulated risk reward before enter the trade. Option house, Trade king, TD Ameritrade, option express are good option trading platforms.