Financial assets such as stocks, bonds, commodities, and currencies have seen alternating cycles of increasing and declining values throughout history. This market volatility implies possibilities for traders and investors trying to expand their money. Finding online brokers that best suits your personality and financial goals is a vital step in getting the most out of the financial markets.
2022’s Top Online Brokerage Accounts & Trading Platforms
- Fidelity Investments is the best overall.
- Fidelity Investments is the best ETF broker.
- Fidelity Investments is the best low-cost broker.
- TD Ameritrade is the best broker for beginners.
- TD Ameritrade is the best mobile broker.
- Options Broker of Choice: tastyworks
- Interactive Brokers is the best broker for advanced traders.
- Interactive Brokers is the best broker for international trading.
Fidelity Investments is the best overall broker, the best broker for ETFs, and the best broker for low costs.
Why Did We Pick It?
Fidelity maintains its multi-year dominance as our top selection for best overall broker and best broker for low costs. For the first time, the business took the top spot in our Best Broker for ETFs category, beating out Charles Schwab. Fidelity provides a full-service experience to both institutional and retail clients by presenting complex technologies through a simple process, all at a cheap cost.
- Committed to the abolition of common account fees
- Account features and a strong portfolio analysis
- Excellent order fulfilment
- Active Trader Pro platform is quite powerful.
- Indexing directly
- Over 7000 US equities and ETFs provide fractional shares.
- Increased broker-assisted trade costs
- Some index trading requires a minimum balance.
- Non-U.S. citizens have no access.
- To access all tools, several platforms may be necessary.
Fidelity is our overall top selection, as well as our best low-cost broker and best broker for ETFs, thanks its ongoing product advancements, outstanding customer service, unrivalled value, and extensive research and instructional tools. Fidelity’s illustrious history began in 1946 when the company was founded. The Boston-based business is among the top brokerage firms in terms of assets under management, with $4.3 trillion in discretionary assets as of March 2022.
The company has also improved its mobile experience with a revamped app dashboard that features streaming quotations on the main page and more news feed options for investors searching for personalised assistance. FidFolios replicate indexes with ownership of the underlying stock rather than an ETF.
After years of fierce rivalry, Fidelity has topped Charles Schwab as our best ETF broker this year. Fidelity, like Schwab, provides extensive ETF-focused instructional content, robust ETF screening tools, and a diverse selection of ETFs. However, it was Fidelity’s fractional share trading in ETFs that propelled them to the top.
Fidelity has been an industry pioneer in fee reduction, and it has a superb reputation as a broker with a massive customer care network to back up its low-cost, high-value product. Investors seeking an online broker that keeps expenses low while providing value will have a difficult time finding a better broker than Fidelity.
TD Ameritrade is the best broker for beginners and the best broker for mobile users
Why Did We Pick It?
Because of its easy interface, extensive educational offering, and great mobile options analytics, research facilities, and trading tools, TD Ameritrade retains its position as the Best Broker for Beginners and the Best Broker for Mobile.
- A broad variety of product options
- Excellent educational content
- Trading technologies and options analytics that is second to none across platforms
- The paper trading tool with exceptional capabilities
- Excellent client service
- Some account fees are rather hefty.
- There are no fractional shares available.
- An automatic cash sweep must be enabled.
- Only OTC trusts, ETFs, mutual funds, and Bitcoin futures are permitted for cryptocurrency trading.
Because of its continued dedication to providing investors with simple access to some of the industry’s greatest instructional content, mobile trading tools, and research amenities, we picked TD Ameritrade to repeat as the winner of our best broker for beginners and best broker for mobile categories.
TD Ameritrade is a leading full-service internet broker that was acquired by Charles Schwab in 2019. True to tradition, the firm continues to provide new product advancements, such as revisions to its already superb charting capability and the announcement of a portfolio summary tool in 2022.
Access to powerful backtest tools facilitates the development of personal trading strategies, while the application of these methods may be rehearsed utilising the platform’s extremely capable paper trading feature. TD Ameritrade provides a uniform experience in terms of functionality, accessibility, and flow across mobile, desktop, and online platforms.
Interactive Brokers: The Best Broker for Advanced Traders and International Trading
Why Did We Pick It?
Because of its variety of worldwide assets and extensive analytical tools and calculators, Interactive Brokers (IBKR) remains our top broker for both expert day traders and international traders, even though the closest competition is still well behind it in these two categories.
- Superior order fulfilment
- Contingent commands for every possible scenario
- Unrivalled selection of investable foreign and local assets
- Interest rates on margins are low.
- Trader Workstation (TWS) is a strong and highly configurable trading platform.
- IBKR SmartRouting is not available to IBKR Lite customers.
- TWS can be challenging to learn.
- Backtesting of proprietary trading algorithms or automated trading is not permitted.
- The modest fee-based pricing at Interactive Brokers is tiered and might be perplexing.
Because no other broker offers such a diverse range of investable worldwide assets, advanced trading technology, and extensive research capabilities, Interactive Brokers is our top option for both skilled and international traders. IBKR is a solid, well-capitalized broker that is also publicly listed, with 1.92 million customer accounts and $2.17 million in daily trading values.
IBKR is the greatest international broker hands down, with access to 150 markets, trading in stocks, options, futures, currencies, bonds, ETFs, crypto, and more supported in 200 countries, and funding methods accessible in 24 currencies. Recent additions include market-rate interest paid on uninvested cash, the IBKR GlobalTrader mobile app, and the provision of fractional shares trading for European shares and ETFs.
Financial markets and all assets are available to international traders via desktop, online, and mobile versions, including the IBKR mobile and IBKR GlobalTrader apps.
tastyworks: Best Options Broker
Why Did We Pick It?
We selected tastyworks as the finest options trading platform because of how it tailors tools and information to the demands of its options-focused clientele. Furthermore, tastyworks’ options pricing is set up with caps, making it the lowest cost brokerage for big volume, high-frequency option traders.
- Optional commission structure with a cap
- Tools that are well rated for assessing and monitoring option trading
- Excellent option-specific materials and teaching resources
- Recent dashboard enhancements provide an even better trading experience.
- The Follow Feed function lets users keep up with the transactions of tastyworks’ TV superstars.
- Investment possibilities are limited.
- There are few investment and retirement resources.
- Portfolio analytics are lacking.
- There is no news or basic analysis.
Tastyworks retains its position as the finest options broker due to its easy delivery of an industry-leading blend of options-focused products and content. tastyworks, which was launched by tastytrade in 2017, was produced by the same individuals that conceived and developed TD Ameritrade’s highly respected thinkorswim® programme.
Tastyworks offers relatively competitive options trading costs, with notable features such as commission limitations for big lot sizes and the lack of any commissions for closing positions. These cheap commissions, fortunately for tastyworks users, do not come with a platform that provides bad options analytics, cumbersome platform workflow, or sluggish trade execution. In reality, the tastyworks platform integrates all of these features in a way that ranks among the best of all the organisations we evaluated.
Tastyworks has responded to consumer demand for social trading capabilities by allowing users to follow individual traders in real time and examine and reproduce trading techniques used by other traders. Although tastyworks continues to offer excellent customer support, a restricted price structure on options transactions, and outstanding options-related instructional and trading content, our revised approach penalises them for a lack of critical research elements and limited mobile charting capabilities. A company representative informed us that they are working on these issues, but any improvements will be too late to prevent tastyworks from losing its position as our best broker for advanced options traders and best broker for mobile options traders to Interactive Brokers and TD Ameritrade, respectively.
The best online brokers offer strong customer support, robust research and analytical tools, and extensive educational content. The best platforms offer a diverse range of available assets and a transparent fee structure with limited gamification tactics. They also profit from their clients’ trading activity, whether directly or indirectly.
Finally, when you’re ready to take your trading to the most modern platform accessible, with access to the largest international markets by far, Interactive Brokers` expertise is unrivalled.
The Best Online Brokers Comparison
|Per Contract Options
|Max Options Legs
|# of No-Load Mutual Funds
|Fractional Share Trading
Frequently Asked Questions
What Are Your Options?
An options contract grants the holder the right, but not the responsibility, to purchase or sell the underlying asset at a certain price on or before a specified date. There are two main categories of choices: A call option allows you to buy a stock, whereas a put option allows you to sell a stock. The striking price (also known as the exercise price) is the price at which you would purchase or sell the stock if you choose to execute the option. The expiration date is the day on which the options contract becomes worthless. Because the value of options is derived from underlying assets, they are classified as derivatives.
How Can You Begin Trading Options?
If you already have a brokerage account with a broker who supports options, you can apply to enable them. If you are accepted, the broker will notify you of the options level at which you are permitted to trade.
Once you’ve been permitted to trade options, the following step is to determine which options to trade. The sort of options contract you trade is determined by the expected movement of the underlying stock:
- If you believe the stock price will climb, purchase a call option and sell a put option.
- If you believe the stock price will decline, purchase a put option and sell a call option.
- If you anticipate that the stock price will remain stable: sell a put option or a call option
How Much Capital Is Required to Trade Options?
That is dependent on your broker and the options methods you choose. In general, the minimum necessary investment for level 1 (entry-level) options trading is less than $1,000 and can be as high as $10,000 for level 2 or level 3 options trading. Even though the needed minimum is minimal, it’s usually a good idea to start trading options with at least $5,000 to $10,000.
What Should You Look for in an Options Trading Platform?
While pricing is one element to consider when selecting an options broker and trading platform, there are others to consider. If you are a beginning trader, it will be beneficial to have a broker who provides extensive instructional resources, such as articles, videos, and webinars. Intermediate and experienced traders will require a stable trading platform as well as a comprehensive set of options-specific trading tools and materials.
Options trade commission structures are typically more intricate than stock trade commission structures. Until the industry-wide commission cutbacks in the autumn of 2019, most brokers charge a fee for each leg of options spread in addition to a per-contract commission. Per-leg costs, which made 2- and 4-legged spreads costly, have mostly been removed across the industry. Some brokers are now putting limitations on charges charged for specific trading circumstances.
Portfolio margining is also available to investors with quite big portfolios at some brokers. This is a method that evaluates the entire risk in a portfolio that includes equities and derivatives. Portfolio margining allows investors with huge portfolios to lower the amount of the margin loan.
Which Type of Options Trader Are You?
The first and most crucial factor to consider when choosing an options trading account is your trading style. What are your trading style and level of risk tolerance? Which tools do you want to have on hand?
If you’re just starting started with options trading, the level of education and assistance provided by your broker is critical. Frequent traders and those who trade a big number of contracts will be more sensitive to commissions and fees, so review and understand your potential broker’s rates.