7 Best Online Trading Platforms of 2021

·21 min read

Online trading platforms are one of the easiest ways to start investing from home. They conveniently allow users to trade stocks, bonds, funds, and other marketable securities on their own — or have an expert do it for them.

Whether you’re an active trader, a passive investor, or somewhere in between, there’s a type of online trading platform for everyone. Read on to learn more about the best online brokers and trading platforms in the industry today.

Our Top Picks for Best Online Stock Trading

  • Fidelity – Best Overall

  • TD Ameritrade – Best Web Platform

  • Betterment – Best for Hands-Off Investors

  • E*Trade – Best for Beginners

  • Charles Schwab – Best for ETFs

  • Webull – Best for Mobile

  • Vanguard – Best for Low-Cost Funds

Best Online Trading Platforms Reviews

Pros

  • Low or no fees on most securities and brokerage services

  • Variety of wealth management options

  • Robo-advisor option for simple investment strategies

  • 200 investment centers around the country

Cons

  • High fees on managed options and broker-assisted trades

  • Doesn't support futures or cryptocurrency trading

  • Account verification process may take a few days

Fidelity stands out as our best overall platform by offering one of the lowest margin rates (4%) on the market as well as four different mutual fund products with zero expense ratios. Fidelity has no account fees or minimum deposit for opening a retail brokerage account or an IRA. The company doesn’t charge fees for low balances in mutual funds, or for IRA closeouts, late settlements, reorganizations or insufficient funds.

Fidelity offers many different ways to invest. If you have a single investment goal in mind, you can either manage the portfolio yourself or use the company’s robo advisor Fidelity Go. For larger portfolios and a more diverse investment strategy, you can choose from three different wealth management plans assisted by personal wealth management advisors.

Pros

  • $0-fee stock, ETF, and options trades

  • Ability to trade in Forex and cryptocurrency

  • Several web platforms and a mobile app available

  • Advanced analytical and stock tracking tools

Cons

  • High commission on no-load mutual funds

  • Does not offer fractional shares

  • The platform can be difficult to navigate for beginners

TD Ameritrade is one of the largest online stock trading platforms, offering investment options that some other platforms don’t, including free Forex trading in 21 currencies. TD Ameritrade also allows you to purchase IPO stocks either on the primary market (if Ameritrade is part of the seller group) or on the secondary market.

Users can access all trading information and the company’s educational, research, and planning tools through TD Ameritrade’s web platform and mobile app. This includes the TD Ameritrade TV network, daily market commentary, and even social sentiment analysis from Twitter.

The thinkorswim platform allows experienced investors to run simulations before actually putting money into a trade, as well as generate advanced charting and earnings analysis. You can also create Watch lists and receive alerts that track the price, volume and position of stocks on your list. TD Ameritrade clients can trade all asset classes offered using the mobile app.

Pros

  • Hands-off investing with cutting edge technology and qualified financial advisors

  • 0.25% per year on your investment balance

  • 0.40% per year for premium advice and unlimited phone interaction with financial advisors

Cons

  • Limited number of portfolios and ETFs

  • No individual stock, mutual fund, or ETF trading

  • High fees for personalized financial advice with a standard account

Betterment is a Robo-advisor that makes it easy to “set it and forget it” with your investments. It may not be ideal for investors who want to actively trade stocks, but is a great choice for more cautious, beginner, or hands-off investors.

Betterment’s investing platform takes the busywork out of the equation for investors, letting them pick an upfront investing strategy that runs on autopilot. The company uses cutting-edge technology guided by the help of financial advisors in order to help secure the maximum return based on your risk tolerance, investment timeline, and other factors.

Betterment also has multiple account types, from a taxable brokerage account to a traditional or Roth IRA, or even a Simplified Employee Pension IRA (SEP IRA) account.

For a basic investing plan with Betterment, you’ll pay 0.25% per year on your investment balance, and your individual trading costs are included in that amount.

Pros

  • $0.50/contract if you make 30 or more trades per quarter

  • Managed portfolios with annual fees as low as 0.30% of invested assets

  • Mobile app for trading on the go, customized stock screening, and third-party research

Cons

  • $19.99 transaction fee for mutual funds not on the no-transaction-fee list

  • Automated investment accounts require a $500 minimum to open

  • High margin rates relative to its competition

E*Trade is a pioneer in online trading that provides a large variety of investment options, from simple online brokerage accounts designed for new investors to advanced investing and trading options for experienced traders.

There are $0 fees for online U.S.-listed stock, exchange-traded fund and options trades, making it easy for new investors to start building their portfolios. There are also managed portfolios for those who may need more guidance with annual management fees starting as low as 0.30% of assets invested.

E*Trade has over 9,000 mutual funds to invest in, over 4,000 of which are no-load, no-transaction-fee funds. E*Trade also offers checking and savings accounts that allow you to transfer funds between all your accounts without paying any fees.

Pros

  • $0 fees for ETF, stock, and options trades

  • Ability to invest in foreign markets

  • Large variety of research tools

  • Invest on your own or with an investment expert at no extra charge

Cons

  • No automatic cash sweeps

  • Limited number and regions for international stocks

  • Relatively high margin rates

Schwab has two main trading platforms — Streetsmart Edge (desktop-based) and StreetSmart Central (web-based) — though they also offer a streamlined tool called Trade Source for buy-and-hold investing. Basic trades can be done either at Schwab.com or on the StreetSmart mobile trading app, while options trading can be done via the StreetSmart Central platform.

Investors opening a brokerage account with Charles Schwab can do so without a required account minimum and enjoy $0 online stock, ETF and options trading and management fees, although there is a standard 65-cent per options contract fee. A full-service brokerage, you can also invest in traditional, Roth and Rollover IRAs with zero fees for online equity trades.

Through Schwab’s Global Account you can trade stocks in 12 foreign markets, again with a $0 account minimum. Schwab offers self-directed trading options but will also provide automated trading as well as planning and investment with an expert advisor at no extra charge.

NOTE: In October 2020 Schwab announced the completion of its merger with TD Ameritrade. For the purposes of this article, we have evaluated them separately as they are still operating independently. The two companies expect their integration process to take between 18 and 36 months to complete, though Schwab has stated that they will keep Ameritrade’s thinkorswim and thinkpipes trading platforms.

Pros

  • No commissions, trading or account fees, and minimum account deposit

  • Research data for both basic and technical investment strategies

  • Advanced order types available (market, limit, stop loss, stop limit)

  • Paper trading feature allows users to practice before investing real money

Cons

  • No fractional trades, mutual funds, or crypto trading available

  • Provides a lot of data, so much that beginning investors may find it overwhelming

  • Automatic dividend reinvestment not available

Webull is a mobile app-based brokerage that offers commission-free stocks, ETFs, and other trading options. The platform is designed for intermediate users, with advanced order types, advanced charting, and tons of stock market research data for users to develop personalized investment strategies.

Although Webull has apps for web and desktop, the platform’s mobile app remains a very strong version and outclasses competing apps. Its design is simple and effective, the content is easy to navigate, and trading is seamless, which makes the platform perfect for active traders.

Webull also has one of the best trading simulators (paper trading) among all the brokers we considered. It can help beginner traders who want to take the next step in their investing journey learn the basics and familiarize themselves with the platform and the intricacies of active trading. The company even holds competitions with monetary prizes to encourage new traders to practice.

Pros

  • Owned by shareholders

  • Low pricing or no management fees across the board

  • Large variety of index funds

  • Personal Advisor Service pairs investors with financial advisors

Cons

  • Limited research and data than many of its competitors

  • Complex commissions system for options trading

  • Basic trading platform unviable for active traders

Unique among online trading platforms, Vanguard is not a privately owned company. Instead, it’s owned by the shareholders of the funds it manages. This means that the profits earned by Vanguard funds are reinvested in the company, and investors get to keep more of their money. Vanguard’s particular strong suit is index mutual funds, although they do offer active mutual funds, stock trading, CDs, and ETFs, as well as a number of IRA accounts.

Vanguard’s Personal Advisor Services pairs a financial advisor with the investor to analyze investment goals and custom build an investment plan. Once approved, the advisor will manage the fund and periodically rebalance it.

Vanguard also allows you to transfer funds and ETFs from other companies into their funds so you can manage all your investments on a single platform. Transferring funds from one broker to another can also save you some, as you don’t have to sell your shares in one fund, pay taxes on the distribution, and then reinvest in another fund.

Other Companies We Considered

The following companies were evaluated by us but did not make it into our list of best online trading companies.

Robinhood

Pros

  • Streamlined, easy-to-understand web and mobile platforms

  • No account minimum and low trading costs

Cons

  • Limited educational materials and trading tools

  • Weak customer support

Robinhood occupies an interesting space in the online trading platform sphere. Although mainly marketed towards young people new to investing, the platform is best suited for investors who already have some experience in trading due to its lack of general guidance. Its lack of flexibility and multiple controversies related to company reliability and trustworthiness kept it out of our top list.

Cash App

Pros

  • Fractional share investing available

  • Easy to sign-up and use

Cons

  • Limited selection of investment products and account types

  • Lack of reliable customer support

Cash App is unique in that it’s both a peer-to-peer payment service and a stockbroker. Think of it as a blend of Venmo and Robinhood’s features: you can send and receive money and spend with a debit card from your account, all the while trading stocks in the same app. However, Cash App is not a dedicated investment platform, and its basic selection of accounts and securities will leave more involved traders wanting more.

SoFi

Pros

  • $1 account minimum and barely any fees

  • Free access to financial counseling

Cons

  • Trading is limited to stocks, ETFs, and crypto

  • No tax loss harvesting

What SoFi lacks in advanced tools it makes up for with affordability and a user-friendly platform. The company features an excellent trading platform for beginners thanks to its near complete lack of fees, low account minimum, and free counseling from the company’s financial advisors. It also lets users choose between DIY investing or using a robo advisor to automate the investing process. However, the trading limits pushed it down our list.

Merrill Edge

Pros

  • 24/7 phone and live chat customer service

  • Extensive third-party research and educational tools

Cons

  • Relatively high fees and rates

  • Mobile app is lacking in functionality

Merrill Edge’s greatest advantage over other companies is knowledge and support. The broker provides access to a wide variety of educational material and research tools for clients to use, and its customer support is responsive and always available on several channels at a time. The company’s fees and margin rates are noticeably higher than its competitors, however, making it a better option for long term investing than for active trading.

Interactive Broker

Pros

  • Variety of investment products

  • Low commission, fees, and margin rates

Cons

  • User interface awkward to navigate, especially for beginners

  • $20 monthly inactivity fee for accounts with less than $2,000 balances

Interactive Brokers has one of the largest selections of investment products to trade across all the platforms we evaluated. This flexibility is further aided by its affordable prices — other than its $20 inactivity fee. It did not excel in any one area, which is why it did not make our final list.

Ally Invest

Pros

  • Large selection of products and low fees

  • Low minimum investment requirement of $100 for managed portfolios

Cons

  • Mutual funds have a transaction fee of $9.95

  • No fractional share trading

Like many other brokers that didn’t make it to our top list, Ally does not stand out in any particular field and lacks advanced features. However, it has a good selection of products, low fees, and synergizes extremely well with its banking products, making it a good option for Ally Bank customers. Moreover, its managed portfolios have one of the lowest minimum investment requirements in the industry.

Tastyworks

Pros

  • Options-focused charting and low commissions on options trading

  • Fast and reliable platform with multiple order types

Cons

  • Limited selection of investment products

  • Cryptic and intimidating user interface

Tastyworks is a highly customizable trading platform best suited for experienced active traders, who won’t be bewildered by its features and interface. The platform’s suite of tools allow users to build and analyze complex investment strategies, especially for options trading. Nonetheless, it lacks in certain areas, namely its selection of securities and its deposit and withdrawal options.

TradeStation

Pros

  • Robust trading platform with powerful charting & analysis tools

  • Comprehensive research and educational resources

Cons

  • Multiple pricing choices can be confusing

  • Numerous account fees; steep minimum activity fee of $99.95/mo

Another platform aimed at more advanced traders, TradeStation features robust analytical tools that include advanced market scanning, customizable charting, and trading strategy backtesting. This may sound overwhelming for less-experienced traders, but the broker’s wealth of educational resources helps set new users on the right path. Where TradeStation does disappoint is with its complicated pricing structure and long list of steep fees.

Moomoo

Pros

  • No account minimum, commissions on trades, and contract fees

  • Enhanced market data and research tools

Cons

  • Limited investment options; no crypto, mutual funds, bonds, forex

  • No phone or live chat support

Moomoo is one of the youngest companies that we evaluated, and its unique social design makes it stand out from the crowd. The broker integrates social aspects into its platform by hosting a global investment network with discussions and public portfolios and providing financial news 24/7. Despite Moomoo’s poor customer support and limited investment options beyond stocks and ETFs, its affordability and comprehensive tools make it worth considering.

Online Stock Trading Guide

Online trading platforms facilitate the process of buying and selling marketable securities. Investors use these platforms to carry out trades, house their cash, access information on current market trends, and more. Some brokers even offer investment planning advice in addition to the functionality of their trading platform.

How Do Stock Trading Platforms Work?

Online stock trading platforms generally work through a brokerage account or a securities account. By transferring money into these accounts, traders can invest directly into financial assets, such as stocks, mutual funds, ETFs, options, futures, and bonds, effectively cutting out the middleman from the investing process. Not all brokers exclusively work this way, though.

Types of Brokers

Although every trading platform is different, online stock brokers can be split into two broad categories: discount brokers and full-service brokers.

  • Discount brokers offer self-directed portfolios, which provide a hands-on investment approach, allowing you to build a portfolio with the investment financial products or securities you’d like to trade. With a discount broker, you’re in complete control of your securities and when you’d like to trade them. Robinhood and Webull are examples of discount brokers. These brokers offer brokerage accounts that require low to no account minimums and may waive some of their fees for executing a certain amount of free trades per month, which makes them ideal for active or frequent traders.

  • Full-service brokers operate managed portfolios, which are designed for clients who want a more passive investment approach. Financial experts — or a robo advisor — are in charge of monitoring this type of account and optimizing it according to a client’s specifications, which means you don’t need to know how to invest in stocks. These brokers usually feature other advantages, such as retirement and estate planning, wealth management, tax assistance, and financial and investment advice. Consequently, account minimums and fees are much higher, so they are best suited for high-net-worth investors who wish for a more personal level of service.

Types of Orders

Orders are instructions sent by investors to their brokerage directing them to buy or sell a security. This is done on the phone with a stockbroker or through an online trading platform. The three most common types of orders are market orders, limit orders, and stop-loss orders.

Type of Order

Description

Advantages

Disadvantages

Best used by…

Market Order

An order to trade at the best possible price available in the current market.

Trades are issued and executed almost immediately. Low cost.

Investors have no control over the price of the security.

Investors trading on real-time news or at excessively high frequencies.

Limit Order

An order to trade at a specified price or better.

Trades are issued at a price of the investor’s own choosing.

Trades might not take place if there is no demand or supply. Higher commission fees.

All types of traders. Patient investors with no rush to trade.

Stop-loss Order

An order to trade at the best available price after a specified price is triggered.

No risk of missing trading opportunities. May help reduce potential losses.

Trades might be executed at a way worse price than expected.

More advanced traders.

How Do You Choose the Best Trading Platform for You?

The three main things to consider when choosing an online trading platform are your investment experience and style, your trading needs, and your personal finance goals.

1. Investment experience and style

How long you have been trading — or if you’ve ever traded at all — is closely tied to the type of platform you should choose. Beginner traders should look for platforms that offer basic educational resources, responsive customer support, and that allow them to practice trades before getting into the real thing. Experienced traders will benefit from platforms that let them issue specific types of trades, have more complex analytics tools, and allow them to start trading as soon as possible.

The type of platform you should choose also depends on your trading practices. Will you be logging into your platform to buy or sell securities frequently? Or are you a more passive investor who is happy leaving the busy work to a financial professional?

2. Trading needs

Your trading needs are the things you cannot do without on your trading platform. For example, day traders make numerous trades in the span of a single day, so they need a platform that’s fast and reliable while having the lowest possible trading commissions. Meanwhile, traders who are making money to pay for a trip or buy a gift may prioritize integration with their banking accounts to send their yields directly to savings — visit our page to check out the best saving accounts of 2021.

Before you settle on an online trading platform, make sure it can accommodate your needs based on your trading habits.

3. Financial goals

One of the most important questions you should ask yourself before beginning to invest is why you’re doing it in the first place. Will the money from trading go to a specific expense or are you planning to supplement your regular income? Are you trading to build up a retirement account or do you simply expect it to become a hobby?

Be honest with yourself when answering this question, since the platform you should choose ultimately depends on your goal for trading. If your goal is mainly to throw a wrench in the system by investing in meme stocks, your platform should give you the freedom to do so.

Online Trading Platforms or Robo Advisor?

People sometimes confuse online trading platforms with what are known as robo advisors. Robo advisors offer investment management services through a virtual platform, like online stock brokers. However, these handy financial planning services are automated, algorithm-driven, and operate with little to no human supervision.

Robo advisors are best for a passive investing strategy, since clients don’t need to know how to buy stocks. Their algorithm can determine and adjust your portfolio according to your financial goals and risk tolerance. If you want to learn more about this type of platform, we recommend you take a look at our list of best robo advisors.

What Do You Need to Start Trading Online?

Online trading platforms and stockbrokers adhere to some rules and regulations, just like traditional brokerage firms. To avoid future liabilities, online brokers will ask for certain information prior to opening a trading account. Most brokers required the following:

  • Personal information (your full name, physical and postal address, date of birth, phone number, email address)

  • A copy of a government-issued ID, such as your driver’s license or passport

  • Social Security Number or taxpayer identification number

  • Employment information (job title, department, work location, start date, etc.)

  • Annual income

  • Bank account information (if you’d like to fund your account through direct deposit)

  • Brokerage account information (if you’re transferring an account from another firm)

Companies may also ask for your desired risk tolerance and what your investment goals are to determine the best type of account for you.

Best Online Stock Trading FAQ

Which online trader is the best for beginners?

Beginner investors should look for online trading platforms that are easy to navigate, offer comprehensive educational tools and top-notch support and have low fees and minimum account balances. We chose E*Trade as our Best Online Trading Platform for Beginners because of its user-friendliness, focus on online education and robust trading simulation services.

What are the best FOREX trading platforms?

Many of the most well-known and popular Forex brokers have developed platforms that function differently from regular discount brokers. These include some of the highest-ranked and widely-used trading platforms, such as MetaTrader 4, cTrader, and ZuluTrade. These platforms excel in breadth and depth of product offerings, customer support, trading education, and trustworthiness.

What is the cheapest online stock trader?

When you're looking for a cheap online stock trader, dig deeper than just stock and ETF trades since all online trading platforms offer these for $0. Your best bet is to go with a discount broker since these have reduced commissions and as little as $0 to $500 minimums to open an account, though this does come at the expense of expert financial advice and analysis.

What trading platforms have an OSO?

Most online trading platforms -- even ones geared for intermediate users and below -- allow users to issue an order send order (OSO). Advanced trading platforms generally allow for an even wider variety of conditional orders.

How We Found the Best Online Stock Trading of 2021

The best stock trading platforms make it easy for investors to seamlessly trade securities without charging a fortune for their services. The firms included in our list scored high in the following categories:

  • Online Access – We favored companies that let you invest online seamlessly through easy-to-use platforms and that provide investors with multiple means of managing their account(s).

  • Low Trading Fees – We only considered online stock trading platforms that charge low trading fees or none at all.

  • Access to Investment Research and Tools – We favored online stock trading platforms with tutorials, educational content, and different investment tools.

  • Smart Automation Technology – We considered the kind of technology each platform uses and scored those with automated investing tools higher.

Summary 7 Best Online Trading Platforms of 2021

  • Fidelity – Best Overall

  • TD Ameritrade – Best Web Platform

  • Betterment – Best for Hands-Off Investors

  • E*Trade – Best for Beginners

  • Charles Schwab – Best for ETFs

  • Webull – Best for Mobile

  • Vanguard – Best for Low-Cost Funds

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