The Best Brokers for Active Traders
Serious active traders need to decide which online broker has the best platform for trading. With zero commissions available at most stock trading platforms, traders need to evaluate the features that are most important for their needs. We analyzed dozens of brokerage services, cost metrics and product offerings, and geared our ratings more heavily to features that meet the needs of active traders. For more information on how we choose the Best Brokers, see our methodology.
Active traders of stocks and exchange-traded funds, or ETFs, differ from investors with a buy-and-hold approach to investing. Active trading describes the practice of buying and selling financial assets based on expected price movements in order to make a short-term profit. Active traders seek out small and frequent wins and are less concerned with the underlying business of a stock than traditional investors.
Due to their different offerings, the best online brokerage for traders will be different from the best stockbroker for buy-and-hold investors. Frequent traders buy and sell securities more often, trade during extended market hours and require specific tools that a traditional investor doesn’t need.
To choose the best online stock trading firm, consider your investment goals and strategies. Then match your needs with the online brokers’ features.
An investor seeking the best brokerage account for trading needs to consider the assets she will be trading, as well as how much money she has to deploy. Online stock brokers require varying minimum investment amounts for trading and charge a range for fees for frequent traders.
For the smallest investor wondering, “How much money do I need to start investing?” look for a broker with no minimum investment amount required. Fortunately, most of the best online stock trading platforms like Schwab, E-Trade, Fidelity and TD Ameritrade don’t have minimum investment amount requirements.
Additionally, most major online brokers, with the exception of Speed Trader and Wells Trade, don’t charge annual account fees either. Although, some of the niche online brokers might levy an inactivity fee.
Beyond the zero commissions for trading stocks and ETFs at most brokerages, there are additional fees. Some firms charge for penny-stock trades. Most, with the exception of Robinhood and Firstrade, charge a per-contract fee for options trading.
If you expect to trade on margin, or borrowed money, investigate margin rates charged for this service, as there is a lot of variability in online brokers’ margin interest rates.
Price is one factor to consider when choosing the best brokerage account for you, but it’s wise to consider other factors too. You need to make sure that the broker has good customer service and offers the investments you’re seeking and any other features that are important to you.
Available trading hours are important for traders. Standard trading hours for the New York Stock Exchange and Nasdaq are 9:30 am to 4:00 pm Eastern time on weekdays, excluding holidays. Most of the best brokers for active traders offer extended-hours trading, including Webull, Tastyworks and TD Ameritrade. Additionally, there might be additional trading windows for options, futures and other asset classes.
Consider trading hours, along with customer service hours and specialists when evaluating the online trading sites.
Most of the best stock trading platforms are replete with downloadable systems that offer an array of features including:
- Customizable charting.
- Technical indicators.
- Options and futures trading tools.
- Alerts and watch lists.
- Trade journals.
- Screeners.
- Complex orders.
- Paper trading.
- Calculators and risk analysis tools.
Since each trading platform is different, it’s important to read reviews and match up your needs with the broker’s offering. Thinkorswim at TD Ameritrade is user-friendly and is popular among active traders. Meanwhile, there are some platforms, like Tastyworks, that cater to options traders. Examine the features and customer reviews before choosing the trading platform.
All of the top trading platforms offer mobile apps for Android and Apple products. Mobile apps are important if you expect to trade from your phone. Mobile users should explore the written reviews and ratings on the Google Play and iOS sites.
Each brokerage’s app offering varies. TD Ameritrade offers multiple apps including the basic TD Ameritrade app and the Thinkorswim trading app, along with several other apps. The Fidelity mobile app will transfer you to the web-based platform for some features such as investment research reports.
Not only do app features vary, but ratings do, too. Fidelity’s app ratings at the Apple App Store and Google Play are usually at the top of the list. Tastyworks brings up the rear among brokers U.S. News reviewed, with average ratings below 3 out of 5 on iOS and Android.
If you’re looking to trade stocks and ETFs, then most online trading platforms will work. Most of the best online trading brokers offer stocks, ETFs, bonds and basic options. If you’re seeking complex options strategies, futures, foreign exchange, international stocks, IPOs or penny stocks, then check out the investment products page on the broker’s website. There are only a handful of brokers that provide access to international and currency trading. Day traders and options traders might look for brokers that cater to their preferences.
Investors need to understand how the overall market and economy are growing, or not. The information brokers provide informs fundamental and technical traders alike. Most online investment brokers offer at least general stock market news.
Traders need a specific type of market research and information. Frequent traders need information about price movements and indicators for specific securities, indexes or sectors, which are usually found on charts.
Fundamental investors and those who trade less frequently will look for company and sector research reports, including third-party research. Day traders will be more interested in charting and technical market research.
Fortunately, nearly all investment brokers have stellar security, comparable to banks. The security features typically include:
- Firewalls.
- 128-bit encryption.
- Two-factor authorization.
- Mobile app security features like voice, face and fingerprint recognition.
Every investment broker carries insurance from the Securities Investor Protection Corporation up to the legal limit for each account. SIPC insurance typically covers up to $500,000 per account per brokerage firm, of which $250,000 can be in cash. The majority of major online brokers for trading also have supplemental insurance that covers the broker in the case of bankruptcy or malfeasance. This insurance typically covers millions of dollars of account value.
Customers are not protected against declines in their investment values. These periodic losses occur when individual investments drop in price.
Because brokerage customers have different needs, please consider our other “Best for” brokers lists:
Find the Broker That’s Right for You
The best brokers for buying stocks should have a strong trading platform and low or no trading commissions. Here are our best brokers for buying stocks that fit both those criteria (in no particular order):
While you do not need a human broker to buy stocks, you do need to have a brokerage account, which is the platform through which you can trade securities on the stock market. You can open a brokerage account for free at many online brokers without needing an account manager or human advisor – although this option is often readily available.
The easiest way to buy stocks is through an online brokerage account. You’ll need one of these to access the stock market. Brokerage accounts can be opened for free online at many brokers. Once you’ve opened your account, you simply fund it and start placing trades. Of course, you should do some research to identify what stocks to buy before investing, too.
