List of Stock Brokerage Firms
We used a five-star-based rating system to rate U.S. stock trading companies in the online stock brokers list above. The best brokerage firms would
get the highest, five-star rating. In 2017 not a single firm got five stars, however three brokers were rated at four and half stars. Any brokerage house
with two- or one-star rating should be avoided. Three-star rated firm is perfectly fine, but there are, probably, better options for investors
to consider. All companies with three and half stars and higher are recommended for at least one category of investors.
Every online brokerage firm listed above has its strengths and weaknesses. It might be ideal for one customer and at the same time might not work
for someone else. Before opening a brokerage account, there are a lot of parameters to consider besides commissions, well-known name, and pretty website.
Some of the most important of these parameters are surcharges and fees; friendliness to client's knowledge level (perhaps one is a beginner? or needs
a professional-level trading platform?); availability of investment products a client wants to buy (for example forex, futures, or NTF mutual funds) as well
as availability of online community, virtual trading, and discounts. We suggest to investors to take a time to read brokerage reviews, and see for themselves
if a particular firm is a right fit.
Some online brokers in the list above allow clients to open an account with $0 down: investors should take this opportunity and open few brokerage accounts,
and see which one they like the most. This will also allow investors to take advantage of unique and valuable features some of the companies provide
at no charge. For example,
Ally Invest offers lots of great trading tools and investor community,
and $0 to open account. If a client decides to invest, the firm has hard-to-beat $4.95 commission on stocks and ETFs. With
TD Ameritrade there is $0 minimum to open an account, and a client will get an amazing selection
of independent, third-party investment research, best trading platform on the market, free Level 2 quotes, and generous promotional offer. There are no
inactivity or maintenance fees to worry about - everything is free.
The list of stock brokerage firms names is updated throughout the year. In 2017 TradeMonster and MB Trading were removed from the table above, since they got
acquired and merged into OptionsHouse and Ally Invest respectively. Later in the year Ally Invest itself got acquired by Ally Bank, and Etrade Securities
bought OptionsHouse. If the new parent companies of Ally Invest or OptionsHouse later decide to integrate and re-brand them under their own names as oppose
to keeping them as separate entities, we will update the table accordingly.
All companies mentioned in this article are members of SIPC and FINRA, which means that they have to follow strict government rules and regulations,
and their client accounts are insured (similar to bank accounts FDIC insurance) in case of brokerage company failure for up to $500,000 ($250,000 cash).
If you know a U.S. online stock trading company not listed here that should be included in the table above, please
contact us.
Overview of Special Services at Brokerage Houses
Some online stock trading companies in list above offer only a limited number of services, typically trading in stocks and ETF’s, without offering additional features.
Other brokerage firms supply much more than this, providing managed accounts, robo accounts, their own mutual funds, trading in forex, and much more. This article will
survey these special features, and see which brokerage firms offer them and which don’t.
Forex and Futures
Most securities brokers only provide trading in securities—stocks, bonds, funds, and other instruments defined as securities. Forex and futures are not securities, and
so they’re usually not offered at most traditional brokerage houses. But a few brokers have broken through this mold and do offer trading in at least one of them. E*Trade,
for example, offers access to the futures markets. And Ally Invest customers can trade currencies on the forex market. Fidelity offers neither.
If you do find a securities broker that provides trading in futures or forex, be aware that it may eventually exit the business. TradeStation, E*Trade, and optionsXpress
all used to provide trading in forex, but have since abandoned the service.
Global Investing
In today’s global economy, having access to international markets is necessary to capture all areas of investment opportunity. Some stock brokers in list above provide
access to foreign markets, while others do not. Interactive Brokers clients, for example, can trade on European, Asian, Australian, and North American markets. Available
stock and option markets include Mexican, Canadian, Italian, Swedish, Austrian, Japanese, Indian, and Australian exchanges.
Other brokers provide little to no global investing. Ally Invest, for instance, offers its clients very little in this area. The broker does not even provide access to the over-the-counter market in the United States, where some foreign stocks can be found.
Day Trading
Some online stock trading companies listed in this article provide the advanced technology that day traders need to submit orders quickly to an exchange. Interactive
Brokers’s advanced desktop platform Trader Workstation is able to do just this. The firm also provides unbundled pricing, which can bring the cost of trading down to a
fraction of a penny per share, which could be of value to day traders. Lightspeed Trading also offers unbundled pricing along with advanced desktop software.
Other stock trading companies, like Capital One Investing, offer neither a desktop trading system nor unbundled pricing. Capital One charges $6.95 for every trade submitted through its website or mobile app.
Options
Many brokers provide access to options. But not all of them offer advanced research and trading tools for the securities. Vanguard clients can trade derivative contracts, but the company does not have any search tools other than very simple option chains. TD Ameritrade provides advanced option research tools.
Pricing on options can vary widely as well. Depending on an account’s total monthly volume, Lightspeed Trading charges anywhere between 20 cents and 60 cents with no base charge. TD Ameritrade clients pay 75 cents per contract plus a base charge of $6.95.
Family of Mutual Funds
While most brokerage firms provide trading in mutual funds, some of them manage their own line of funds. Fidelity and WellsTrade (through Wells Fargo) manage their own mutual funds. While Fidelity’s funds are always transaction free when traded at Fidelity, some of the Wells Fargo funds actually have transaction fees at WellsTrade.
There are 111 Wells Fargo funds currently open to new investors. Fidelity manages 322 of its own mutual funds; it also offers 21 exchange-traded funds. Vanguard provides 70 ETF’s and 300 mutual funds.
Most brokers do not offer their own funds. These companies include TradeStation and Robinhood.
Long-term Investing
Buy-and-hold investors will find good resources at some brokers, but not at all. Long-term investors benefit from good customer service rather than low commissions. Brokerage houses that emphasize this model include E*Trade and TD Ameritrade, where 24/7 support is available. Both of these brokers also offer a good selection of mutual and exchange-traded funds, which may be of interest to long-term investors.
Other brokers emphasize the opposite. These firms provide low commissions, but less than stellar customer service. Brokers in this category include Robinhood and SogoTrade. These firms would be better for short-term traders who don’t need a lot of guidance.
Investment Advice and Managed Accounts
During the past few years, more online brokers in the list have been offering managed accounts in addition to their usual line of self-directed accounts. Additional investment advice may be available in some of these cases.
Merrill Edge, for example, offers a managed account package that costs 0.85% per annum. This asset-based fee includes a face-to-face consultation with a financial advisor at a Bank of America location at least twice per year. The portfolio itself is managed by Merrill Lynch investment advisors. There is a $20,000 deposit requirement to begin the service.
Other brokers do not provide any type of investment advice or portfolio management. Firstrade is one example.
Robo-advisory Accounts
Besides traditional human-managed accounts, some brokers have gone one step further by providing accounts that are managed by computer programs. Called robo accounts, customers pay anywhere from 0.0% up to 35 basis points for a software program to make all trading decisions.
Some brokers specialize in this model and don’t offer self-directed accounts. Betterment and Wealthfront are two examples. Other brokers, like Schwab and E*Trade, offer robo-advisory services plus human-advised accounts plus self-directed accounts.
The cost of robo-advised accounts varies among the firms that offer the service. Schwab has managed to provide its service for free, while Fidelity charges 0.35%. Trades placed by a robot are always commission free.
Despite the move to this intriguing method of portfolio management, there are still on-line discount firms that provide only self-directed accounts. Firstrade and Robinhood are two examples.
Stock Trading Companies Specialities Summary
Most brokerage houses today offer more than just stocks and bonds. Do some research before opening an account, and you’ll probably find a service that interests you.
Updated on 7/24/2017.