Best broker for options young investors

Best Options Trading Brokers and Platforms. NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent. We spent over 300 hours reviewing the top online brokers before selecting the best for our readers. And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. Who is the best options broker today? The answer depends on whom you ask and what they value. For some investors, the best broker for trading options is the one with the cheapest commissions. Others prioritize trading tools, platform design, research, customer service or all of the above. While most of the brokers on our best-of list below would be a good, all-encompassing choice for many investors, we’ve also highlighted the standout candidates in specific areas that matter most to options traders. Unsure what you’re looking for? See how to choose an options broker for more on what can make or break an options trading experience. Summary: Best online stock brokers for options trading. Best for low-cost. Best options trading platform.

Best for research and education. Best overall for options trading. Our top picks cover all the option trader needs — access to high-quality research, analytical tools, a user-friendly platform — at reasonable prices. TD Ameritrade and Interactive Brokers earn high marks for options investors for their advanced trading platforms, deep bench of research and tools, plus their high-caliber options trading capabilities. TD Ameritrade handily serves option traders no matter where they are on the learning curve. The broker’s thinkorswim platform offers a robust options trading experience for active investors seeking professional-grade tools to identify trading opportunities, analyze potential risks and rewards, test trade strategies and quickly place even the most complex options trades. The broker’s web-based Trade Architect platform is for investors just getting into options or those who don’t require a high-octane platform. Its stripped-down, easy-to-use interface won’t overwhelm newbies. And although Trade Architect isn’t as fully stocked with tools and data as thinkorswim, it’s no slouch, either. Intermediate investors will find advanced features like a marketoptions heat map, screening and tradefinder tools, and streaming news. Get details in our TD Ameritrade review. For cost-conscious, active options traders looking for low costs and a platform with a lot more meat on its bones, Interactive Brokers may be more your style. Interactive Brokers charges just 70 cents per contract with no base fee ($1 minimum order), plus discounts for larger volumes, if you can manage the $10,000 account minimum. Its Trader Workstation platform (with an options method lab) is considered one of the best and most sophisticated around.

But watch other fees to ensure that the lower commissions pay off. Both brokers allow prospective clients to test-drive the goods without putting any real money on the line. TD Ameritrade offers a paperMoney virtual trading account to test out the thinkorswim platform. At Interactive Brokers, once customers open a real account (which has a $10,000 minimum funding requirement), they can set up a paper trading account that offers them hands-on practice using IB’s Trader Workstation platform and tools. Best brokers for low-cost options trading. These brokers offer competitively priced options trading commissions and have eliminated or dramatically capped minimum trading fees. In early 2017 most of the mainstream online brokers slashed commissions to levels once reserved for their deep-discount peers. That doesn’t mean that they’re the best deal in town for every investor. For active options traders, eOption earns five stars from NerdWallet for its low options trade commissions. The company charges a fixed $3 base plus 15 cents per contract. Another plus: eOption is known for having some of the lowest margin rates available. Although eOption charges a $50 annual inactivity fee on accounts that have placed fewer than two trades in the past 12 months or have less than $10,000 in credit or debit balances, the minimum trade workaround isn’t onerous, even for infrequent traders. Charles Schwab’s trade commission of $4.95 base rate plus 65 cents per contract puts it within spitting distance of deep-discount peers.

Schwab recently fully took over the old OptionsXpress and incorporated that broker’s options experience into its own platform, with both web-based and mobile functionality. Commissions aren’t the only costs associated with trading options. Platform, data and other fees can quickly cancel out what you save on commissions. See our full reviews of Charles Schwab and eOption for details on what they offer. For those simply looking for a cheap way to execute options trades, Charles Schwab and eOption get the job done. Best options trading platforms. These brokers offer some of the most powerful trading platforms available for a reasonable price. Judging a broker’s trading platform by the number of features it offers is like buying a car based solely on what you read in the dealer brochure. While all investors have their must-have features, what’s more important is how the platform feels when it’s in their hands. The trading platforms at Ally Invest and TradeStation offer a wide variety of analytical tools, provide stable and speedy trade execution, and allow investors to customize the tools and design to best suit their needs.

Unlike TradeStation, Ally Invest (formerly TradeKing) is technically a deep discount broker as reflected in its commissions (options traders pay a $4.95 base plus 65 cents per contract with only one base charge per spread), $0 account minimum and free access to research and data. Frequent traders (those who place 30 or more trades per quarter or who carry a balance of $100,000 or more) pay a discounted $3.95 base and 50 cents per contract. But don’t be fooled by the lower prices: Customers get a lot of platform power for free. Ally is suitable for newer options investors. The browser-based platform resembles the offerings of its pricier competitors and comes with free options trading tools for screening and advanced charting. Navigation is easy and streamlined. Customers can create a custom dashboard with movable modules with the data and features they want to use. The setup extends to what users see across all devices, including mobile and tablet. TradeStation is best left to more experienced, tech-savvy investors who want to experience options trading using the same tools as pro traders. The broker provides all the tools needed to design, test-drive, monitor, automate and speedily execute the most complex trades via direct-market access (no pesky middleman to slow down the process). Its OptionsStation Pro platform is fully integrated into TradeStation’s regular trading platform.

An added bonus is the broker’s active investor forums, where traders discuss ideas, ask questions and get help. Access to all of TradeStation’s bells and whistles used to come at a steep $99.95 monthly platform fee for those who didn’t meet account balance or trading activity minimums. But in March 2017 TradeStation eliminated the service fee, lowered its trade commissions for stocks and options and tossed in free real-time market data and free access to its market-monitoring and portfolio-level back-testing tools. Educational tools and platform tutorials are plentiful, which is a plus: Because of the sophisticated nature of the platform, it may require some time to become familiar with all that it offers. See more in our TradeStation review. Best research and options trading education. Both offer extensive research and data for free, as well as live classes and webinars for beginning and advanced options traders. If you’re new to options trading or want to expand your trading strategies, a broker that devotes its resources to research and customer education is a must. Because Schwab and Fidelity each have offices across the country in addition to their online options education libraries, they’re able to offer in-person guidance and free seminars on how to trade options, as well as one-on-one guidance on using the tools each platform offers. Fidelity’s constantly refreshed library draws from more than 20 providers, including Recognia, Ned Davis, S&P Capital IQ and McLean Capital Management. The full suite is available to customers when they sign into the broker’s web-based platform. And you don’t have to stop digging when you’re away from your computer: Fidelity has a strong mobile app that lets customers access the company’s full suite of research through a mobile browser. Charles Schwab’s options trading capabilities and lineup of trading data and research got a big boost as the company integrated its purchase of OptionsXpress. In October Schwab re-launched its online platform under the StreetSmart name, with both web-based and mobile functionality, though for now only former OptionsXpress clients have access to the new platform.

In the first quarter of 2018, Schwab will begin rolling out the new platform to all clients. While the platform name is changing, Schwab still provides a fully realized suite of offerings for options traders, including trade assessment tools, customizable screeners, access to Schwab analyst options-market commentary, live online webinars and pre-recorded seminars. Best brokers for beginner options investors. These brokers provide ideal conditions (educational resources, user-friendly platforms, customer support and low minimums) for investors just learning the options trading ropes. TD Ameritrade — one of our top overall brokers — ranked highest in this category, too. But since there are many types of beginners with many different preferences, instead of highlighting the category champions we’ve focused on brokers that are excellent candidates in three key areas: Low minimum opening balance requirements. Ally Invest, TD Ameritrade, Merrill Edge: If you’re not yet ready to devote a lot of your capital to options trading, you don’t want to tie up much in an account to meet the minimum. Many of the brokers on our list require no money to open an account. However, industry regulations require that traders maintain a $2,000 minimum to trade options. Strong customer support. Scottrade and TD Ameritrade: On-call help is particularly handy when starting out. One way to test a broker’s level of service is to contact the company with any questions you have about its option trading offerings before you even open an account.

Scottrade is known for its standout customer service and huge physical presence of 500 branches. So is TD Ameritrade, with around-the-clock phone and email support and 100 branches where clients can attend seminars and meet with investment associates. At the end of 2017, TD’s acquisition of Scottrade will be complete, increasing each broker’s ability to serve clients. User-friendly platforms. Ally, Charles Schwab and TD Ameritrade: There’s nothing better than test-driving a broker’s platform before you commit. Check to see if the broker you’re considering offers paper trading (virtual trading on a platform that mimics the real deal) or contact customer service to see if they will set you up with a demo account. As for brokers discussed in this review, Ally Invest’s browser-based platform is intuitive and easy to customize. And both Charles Schwab and TD Ameritrade have multiple platforms customers can use to start learning the ropes, then graduate to more sophisticated tools and trades if desired. Best options trading brokers: summary. Updated June 30, 2017. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account.

At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action. Study: Best Brokerage for Options - OptionsHouse vs TradeKing vs OptionsXpress. Options trading is not an advanced investment method reserved for the most experienced of traders and certain undomesticated canines of Wall Street. When used correctly, options can help add flexibility to an investor's portfolio and offer some protection when the market goes down. Of course, greater reward mean greater risk, and options trading is not recommended for the first-time investor. But if you’re already comfortable investing with stocks, then you may want to consider making options a part of your portfolio. We’ll explain a bit below before getting into the details of three popular options brokerages. When you buy an option, you’re buying a contract that grants you the right to buy (or sell) a stock at some future date for a specific price - but you don’t own it. So that means you don't have voting rights or access to dividends as you would with a stock. Typically, one option contract equals 100 shares of the underlying security. The two most basic types are a call option, which means you plan to buy shares, or a put option, which means you plan to sell shares. Options allow investors to gain a significant amount of shares in a company for a fraction of the price.

For example, you think the price of a stock is going to rise from $50 to $60. You can buy a call option with a strike price of $55. If the stock rose to $60, that would allow you to buy the stock at $55, netting you a $5 profit on each share minus the option premium. One of the biggest negatives of options are the fees. You pay an amount for the option premium, but there are usually other trading costs as well. There is the chance that your option will expire worthless and you will lose the premium. Those losses can hurt your profits. To help you decide whether options trading is right for you, CreditDonkey has reviewed three of the top online brokers for options — OptionsHouse, TradeKing (now Ally Invest) and OptionsXpress — to see how they compare. Here are the main factors we considered: Trading Platform & Research. We rated each brokerage on a 1-5 scale, with 5 meaning it has superior service and breadth of (excuse the pun) options in that area. As with any investment, fees and commissions should be a major factor in deciding which options provider to use. You want to make sure that your investment method pays off for you and not necessarily for your broker. Also, many brokers offer different pricing plans based on how many options you trade, so the best broker for a casual trader might not be a good choice for an active investor. You’ll also want sophisticated tools to help you take advantage of the benefits that options provide. Each broker offers its own trading platform with varying degrees of customization. The platform should make it easy for you to research a stock without getting bogged down by a lot of unnecessary charts or statistics.

Having a platform that adapts to your needs is key to successful investing. Another essential for an options broker is access to research and education. Many online brokers attract new investors with low commissions but fail to provide the tutorials that will keep them trading. The best brokers teach you investment strategies and give you a virtual trading arena to see how those strategies work (or don’t work) in real-time. Customer service comes in handy when you’ve got a question or find yourself lost amid a sea of graphs and charts and need some help to get back. Also, investing is time sensitive, so you want to make sure that if something goes wrong with the platform, someone will be there to make it right. Best Fees & Commissions: OptionsHouse. Fees & Commissions: $4.95 base + $0.50 per contract, 55. Trading Platform & Research: Virtual trading, webinars, 35. Customer Service: Telephone, e-mail, instant chat, M-F only, 45. If you want to start investing in options but don’t want to spend much money, then OptionsHouse is the best broker for you. It has the lowest costs of any major options broker, which can lead to big savings for all types of investors. OptionsHouse sells contracts based on how many you plan to buy.

Investors pay a base of $4.95 plus $0.50 per contract. That means you can buy 100 contracts for $54.95. Another bonus for options newbies is OptionsHouse’s Virtual Trading Platform. You’ll have $5,000 in virtual money to try out new strategies or just practice your options techniques. OptionsHouse understands that one of the easiest ways to make more on your investments is to spend less on fees and commissions. Beyond the price, OptionsHouse also has more options-specific trading tools than the competition. It’s an ideal combination of “for options traders, by options traders.” OptionsHouse provides the tools for trading but comes up short on teaching you how to use them. Novice investors looking for a master class on Options 101 will need to seek out third-party assistance. Who It Works Best For. The low costs make OptionsHouse ideal for high volume traders. Those who are just getting started in options should consider a broker that offers more education for a higher price. Open an OptionsHouse account.

Best Research: OptionsXpress. Fees & Commissions: $4.95 plus $0.65 per contract, 45. Trading Platform & Research: Virtual trading, Xpress Method education training, 55. Customer Service: Telephone, e-mail, instant chat, live help available Saturdays, 55. OptionsXpress is the options-focused trading platform owned by Charles Schwab. It offers an extensive list of research tools that help break down the risks and rewards of options trading. You can practice trading without spending a dime, though, using the broker’s Virtual Trade. OptionsXpress gives you a free $25,000 virtual account that can access most of the tools that you’d use with real money, just without the risk (or reward). OptionsXpress offers some of the most comprehensive investment tools on the market. Its online education center has all the lessons and tutorials you need to become a smart options investor. This includes the XpressMethod education center, which features several easy-to-follow videos on getting started. OptionsXpress also excels in customer service. Help is available Monday-Friday until 10pm EST, and it is the only broker in our study that offers live help on Saturday.

Who It Works Best For. OptionsXpress really does provide an essential education for options investing, making it a solid choice for beginners. Best Value: Ally Invest. Fees & Commissions: $4.95 base rate + $0.65contract, 45. Trading Platform & Research: Options scanner, Options Education Center, 45. Customer Service: Telephone, e-mail, instant chat, M-F only, 45. Ally Invest combines low prices with extensive research to make it one of the best brokers for options trading. Each contract at Ally Invest costs $0.65, plus a flat rate fee of $4.95. That means a trade with 100 contracts will cost $69.95. The pricing is simple, straightforward and much lower than most of the competition. Despite the low cost, Ally Invest offers research and tools that rival more expensive brokers. It has options-specific scanners to help gauge risks and an education center that’s designed for options rookies. Ally Invest provides a robust options trading platform for the lowest price. The education center is filled with information that will help young investors learn new strategies and help experienced traders brush up on their techniques. TradeKing lacks a virtual trading account for options investing. Who It Works Best For. Investors just getting into options trading will find Ally Invest the perfect place to start. The broker works well for high volume trading as well, but you’ll save money going with OptionsHouse instead. Ally Invest: Get $200 Cash Bonus or $500 in Commission-Free Trades.

Other Brokers to Consider. If you’re looking for an options broker with a more personal touch, TD Ameritrade offers competitive contract prices with the benefit of physical locations. Options orders are $9.99 plus $0.75 per contract. Trading options is a risk but, like with any good investment, it’s a risk that can pay off. Perhaps this review has been the push you have been waiting for to explore what else the investment world has to offer beyond stock trades. Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. More from CreditDonkey: OptionsXpress Review. Options Trading. Add Your Comment.

You might also be interested in. Share on Facebook. CreditDonkey is a stock broker comparison website. We publish data-driven analysis to help you save money & make savvy financial decisions. Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. †Advertiser Disclosure: Many of the card offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace. *See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website. CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

Picking Your First Broker. Let's face it, you can't start investing if you don't have a brokerage account . As a young investor, selecting your ideal broker is often very different than it would be for older investors of the same experience level. Choosing a broker isn't all that different from choosing a stock – it requires a lot of careful contemplation, and not all brokers are right for all investors. There are a number of factors to consider when picking your first broker. With Investopedia's Online Broker Reviews we've created the most comprehensive tool set to help trader of all styles make an informed, efficient and intelligent decision in choosing the right online broker. Before you can choose a broker, you have to know who or what constitutes one. There are two types of brokers out there: those who deal directly with their clients (regular brokers), and those who act as intermediaries between the client and a larger broker (broker-resellers). Regular brokers typically are considered more reputable than broker-resellers. That's not to say that all resellers are inherently bad, just that you need to check them out before you sign up with them. Regular brokers – for example, Scottrade, Capital One Investing and Fidelity – are members of recognized organizations such as the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation .

Breaking it down further, there are distinctions between full-service brokers and discount brokers . As the name suggests, full-service brokers offer many more services to investors than discount brokers do, but these services don't come cheap. With a full-service broker, much of the legwork is done by the broker, who provides the investor with more one-on-one advice as well as individualized suggestions and research. That's not to say that discount brokers leave much to be desired in the customer service department. In fact, many discount brokers provide the option to solicit a broker for advice on a trade with your existing brokerage account. The caveat to remember is that when you do execute that trade, you'll pay considerably more (usually in execution fees) after consulting an actual broker than you would with a regular online trade. For younger investors, discount brokers are probably the best bet. Some people recommend full-service brokers for new investors, but it's probably not financially feasible for a young person to go with a more expensive full-service broker. Besides, today's online discount brokers are widely used and typically provide a vast array of tools for inexperienced investors who aren't sure about their next steps. Plus, assuming you begin slowly, you'll learn a whole lot more about investing if you do some of the work yourself. Trade execution fees are important, but there are other brokerage fees to consider, as well. If you're under 30, chances are you're limited by your budget. When it comes to investing at this age, looking at the fees that might apply to you is essential to ensuring that you make the most of your investment dollar. Here are some additional costs to consider: Most brokers have minimum balances for starting a brokerage account.

Typically, this number ranges between $500 and $1,000 with an online discount broker. While new investors might not want to open a margin account right away, it's something to think about for the future. Margin accounts usually have higher minimum balance requirements than standard brokerage accounts. It's also important to take a look at the interest that your broker charges when you make a trade on margin. It's your money, but sometimes it's hard to get it out of your account. That's because brokers sometimes charge fees to make a withdrawal, or they won't let you take any money out if it will drop your balance below the minimum. Some accounts allow you to write checks from them, but those typically require a much higher minimum balance. Make sure that you understand the rules involved in removing money from an account with your prospective broker. Complicated Fee Structures. While most brokers have similar fee schedules, some brokers have complex fee structures that make it harder to sort out hidden fees. This is particularly common among broker-resellers who may use fee structure as a selling point to entice clients.

If you're looking at a broker that has an unusual fee structure, it's all the more important to make sure that the broker is legitimate, that it will look out for your best interests and that its fee structure will complement your investing style. If the rates seem too good to be true, be sure to read carefully over your account agreement and fee summaries, where additional fees are likely to be hidden. What Kind of Investor Are You? Your choice of broker should be influenced by the type of investor you are. No single broker is good for all investors, so determining your investment style before you start investing is usually a wise decision. Traders don't hold onto stocks for a long time. They're interested in quick and dirty gains based on short-term price volatility , and they make numerous trade executions over a short time span. If you envision yourself as a trader, you'll want to look for a broker with very low execution fees, as high trading fees could quickly eat up your returns. Also, don't forget that active trading takes experience, and the combination of a new inexperienced investor and frequent trading often results in negative returns. A buy-and-hold investor , or passive investor, is someone who holds stocks for the long term. They're interested in letting the value of their positions appreciate over longer periods of time and reaping the benefits at a later date. If you fancy yourself a buy-and-hold investor, your main concern will be avoiding brokers with monthly fees. For a long-term investor, a slightly higher trade commission should be less of a concern. Many investors will find that their investment style falls somewhere between an active trader and a buy-and-hold investor, in which case other factors will become important in picking the most appropriate broker.

For instance, if you're a very young investor (a minor) you won't be able to open your own brokerage account. However, some brokers make it easy to set up custodial accounts and provide fee structures that are more appropriate for teenagers, making it possible for people to start investing at a younger age. As an alternative to a human broker or broker-reseller, it's also worth investigating whether your first broker should be a robo-advisor by reading the Pros & Cons of Using a Robo-Advisor . Eventually, there comes a time when you've got to make that decision and choose a broker. It's absolutely necessary to balance your needs as an investor and as a client – good customer service is essential, too. While your first broker won't necessarily be your broker for life, you have a much better chance of making money as an investor if you put the right amount of time and research into choosing a broker. Best Online Stock Brokers for Beginners 2017. NerdWallet offers financial tools and advice to help people understand their options and make the best possible decisions. The guidance we offer and info we provide are deeply researched, objective and independent. We spent over 300 hours reviewing the top online brokers before selecting the best for our readers.

And to help you find the one that’s best for you, we’ve highlighted their pros, cons and current offers. When you’re a beginner investor, the right brokerage account can be so much more than simply a platform for placing trades. It can help you build a solid investing foundation — functioning as a teacher, advisor and investment analyst — and serve as a lifelong portfolio co-pilot as your skills and method mature. What is a stock broker? A stock broker is a person or an institution licensed to buy and sell stocks and other securities via the market exchanges. Back in the day, the only way for individuals to invest directly in stocks was to hire a stock broker to place trades on their behalf. But what was once a clunky, costly transaction conducted via landline telephones now takes place online, in seconds, for a fraction of what full-service brokers used to charge for the service. (A little lost? Here’s some background on the stock market.) Best Online Stock Brokers for Beginners.

TD Ameritrade : Best overall Charles Schwab : Best overall Ally Invest : Best for no account minimum Merrill Edge : Best for no account minimum & for customer support Scottrade : Best for customer support Motif : Best for low costs Robinhood : Best for low costs Vanguard : Best for mutual funds & ETFs Fidelity : Best for mutual funds & ETFs. NerdWallet’s top online brokers for beginners. Merrill Edge offers high-quality customer service, robust research and low commissions and fees. Customers of parent company Bank of America will love the seamless, thoughtful integration, with a single login to access both accounts. Low commissions and fees. Robust third-party research. Ongoing promotions. Integrated with Bank of America. Free trades for eligible Bank of America customers. No commission-free ETFs. Minimum balance requirement for active trading platform.

Ally Invest may be a deep-discount broker, but its robust trading platform and lineup of free research, charting, data and analytical tools puts it in line with some of its more well-known — and higher-priced — competition. Low commissions. No account minimum. Strong web-based platform. Robust research and tools. No commission-free ETFs. No no-transaction-fee mutual funds. Fidelity may be known for its retirement accounts, but active traders shouldn’t overlook the brokerage’s low trade commissions, wide investment selection, large scope of research and strong trading platform. It’s a well-rounded broker suitable for nearly all investors. Low commissions Large selection of research providers Strong customer service. High account minimum Trade minimum for active trading platform. TD Ameritrade makes up for higher-than-average trading commissions with better-than-average service, research and trading tools that will make everyone from beginner investors to active traders happy. Large investment selection. Free research.

High-quality trading platforms. No account minimum. Good customer support. Higher trade commission. Costly broker-assisted trades. High short-term ETF trading fee. Scottrade offers the kind of hand-holding that beginner investors need to get started, including a breadth of educational resources, in-person support and free investor seminars. Its research offerings make it appealing to more advanced traders, as well. Low trading costs Customer service Large lineup of no-transaction-fee mutual funds. High brokerage minimum No commission-free ETFs Fee for advanced trading platform.

Charles Schwab has earned its strong reputation: The broker offers high-quality customer service, two robust trading platforms and a wide selection of commission-free ETFs and no-transaction-fee mutual funds. No inactivity fees. Two platforms with no minimum or fees. Above-average mobile app. Extensive research. Strong customer support. Higher trade commissions. Higher account minimum. Vanguard is the king of low-cost investing, making it ideal for buy-and-hold and retirement investors. But active traders will find the broker falls short, with no trading platform and increased commissions for frequent trades. Large mutual fund selection Over 50 commission-free ETFs Leader in low-cost funds Helpful customer support. High trade commissions No trading platform or tools Limited research and data.

Robinhood is truly free: There are no hidden costs here. You’ll give up a few things in exchange for free trades — trading tools, research, education, investment options beyond stocks and ETFs — but if limiting costs is your No. 1 concern, Robinhood is a solid choice. No commissions on stock trades No account minimum Streamlined interface. No retirement accounts No web trading platform. Motif’s service is unique, offering investors the ability to trade 30 stocks or ETFs for one low commission. The company is a solid brokerage option for values-based investors and small account balances. Fractional shares Portfolio trades of up to 30 stocks or ETFs Theme - and values-based guidance. No dividend reinvestment Minimal trading tools. More resources for new investors. Ready to place your first order? Read our step-by-step guide on how to buy stock. Unsure of how to build your portfolio? Learn more about stocks, ETFs and mutual fund. Don’t have thousands to invest just yet?

See our suggestions on how to invest $50. Best brokers for beginners: summary. no inactivity fees. for first 25 tradesyear, $20 for later trades. per trade $9.95 per motif. Dayana Yochim is a staff writer at NerdWallet, a personal finance website: Email: dyochim@nerdwallet. com. Twitter: @DayanaYochim. Updated June 30, 2017. Disclaimer: NerdWallet has entered into referral and advertising arrangements with certain broker-dealers under which we receive compensation (in the form of flat fees per qualifying action) when you click on links to our partner broker-dealers andor submit an application or get approved for a brokerage account. At times, we may receive incentives (such as an increase in the flat fee) depending on how many users click on links to the broker-dealer and complete a qualifying action.

5 Common Mistakes Young Investors Make. When learning any skill, it is best to start young. Investing is no different. Missteps are common when learning something new, but when dealing with money, they can have serious consequences. Investors who start young generally have the flexibility and time frame to take on risk and recover from their money-losing errors, but sidestepping the following common mistakes can help improve the odds of success. Procrastination is never good, but it can be especially detrimental while investing because the markets move so quickly. Good investment ideas are not always easy to find. If, after doing research, a good investment idea arises, it is important to act on it before the rest of the market takes note and beats you to it. Young investors can be prone to not acting on a good idea out of fear or inexperience. Missing out on a good idea can lead a young investor to two very bad scenarios: 1. The investor will revise his opinion upward and still purchase an asset when it is not warranted. Perhaps the investor rightly develops an opinion that an asset priced at $25 should be worth $50. If it moves up to $50 before he or she buys it, the investor may artificially revise the price target to $60 in order to rationalize the purchase. 2. The young investor will look for a replacement. In the previous example, the investor who failed to buy the asset that rose from $25 to $50 may quickly try to identify the next asset that will double.

As a result, the investor might purchase another asset quickly, without doing the proper work and research, in order to try to make up for the previous "missed opportunity." 2. Speculating Instead of Investing. A young investor is at an advantage in his or her investing life. Holding the level of wealth constant, an investor's age affects how much risk he or she can take on. So, a young investor can seek out bigger returns by taking bigger risks. This is because if a young investor loses money, he or she has time to recover the losses through income generation. This may seem like an argument for a young investor to speculate, but it is not. Any young or novice investor will have an inclination to speculate if they do not fully understand the investment process. Speculation is often the equivalent of gambling, as the speculator does not necessarily have a reason for a purchase except that there is a chance that it may go up in value. This can be dangerous, as there are many experienced professionals waiting to take advantage of their less-experienced counterparts. Instead of speculating and gambling, a young investor should look to invest in companies that have higher risk but greater upside potential over the long term. So, while a diversified portfolio of small-cap growth stocks would not be appropriate for an investor nearing retirement, a young investor is better equipped to take on that risk and can take advantage accordingly. A final risk of speculation is that a large loss can scar a young investor and affect his or her future investment choices. This can lead to a tendency to shun investing altogether or to move to lower or risk-free assets at an age when it may not be appropriate.

3. Using Too Much Leverage. Leverage has its benefits and its pitfalls. If there is ever a time when investors have the ability to add leverage to their portfolios, it is when they are young. As mentioned earlier, young investors have a greater ability to recover from losses through future income generation. However, similar to speculation, leverage can shatter even a good portfolio. If a young investor is able to stomach a 20% to 25% drop in his or her portfolio without getting discouraged, the 40% to 50% drop that would result at two times leverage may be too much to handle. The consequences of such a drop are similar to those resulting from a loss due to speculation: the young investor may become discouraged and overly risk averse for the rest of his investing life. 4. Not Asking Enough Questions. If a stock drops a lot, a young investor might expect it to bounce right back, but more often than not, it is down for good reason. One of the most important factors in forming investment decisions is asking why.

If an asset is trading at half of an investor's perceived value, there is a reason and it is the investor's responsibility to find it. Young investors who have not experienced the pitfalls of investing can be particularly susceptible to making decisions without locating all the pertinent information. As mentioned earlier, an investor has the best ability to seek a higher return and take on higher risk when they have a long-term time horizon. Investors have their longest time horizons, and therefore a high tolerance for risk, when they are young. Young people also tend to be less experienced with having money. As a result, they are often tempted to focus on how money can benefit them in the present, without focusing on any long-term goals (such as retirement). Spending money now instead of saving and investing can create bad habits and contribute to a lack of savings and retirement funds. Young investors should take advantage of their age and their increased ability to take on risk. Applying investing fundamentals early can help lead to a bigger portfolio later in life. There are also many risks that a youngless-experienced investor will face when making decisions. Hopefully, avoiding some of the common mistakes above will help young people learn investing early and embark on a fruitful investing career.

Best Stock Broker for 2017 – The Top Online Trading Firms. There are many different types of traders, as there are discount stock brokers. Whether you are looking to trade in high volume or only conduct a few trades each year, you must have an online broker who suits your needs. Each firm has its strengths and weaknesses, and choosing the top discount stock broker for you depends on your particular trading style and goals. The order is in site popularity. Compare from the list of broker reviews below. Click on the stockbroker name for our review and for available promotional offers. start investing today. COMPARE stock brokers. Sort through our selection and choose the right stock brokers for you. Visit your chosen stock brokers website and open an account.

Invest in your future by reaping the benefits of digital advising today. Overall Score Commission & Fees Customer Service Ease of Use Tools & Resources Investment Options Account Options. Commission & Fees 910 Customer Service 910 Ease of Use 8.510 Tools & Resources 910 Investment Options 910 Account Options 8.510. Fidelity is a full-featured discount brokerage service that includes virtually every investment and banking service you need. The mobile app is also one of the best for trading on the go. However, the service is slow to roll out new features. Commission & Fees 910 Customer Service 9.510 Ease of Use 910 Tools & Resources 8.510 Investment Options 910 Account Options 810. Charles Schwab is the Nordstrom of the investment world, and customers virtually always leave happy. As a customer, you'll get access to virtually all the investment services that come standard at any major brokerage. However, if you're an active trader, you might find other firms with better options. Commission & Fees 8.510 Customer Service 910 Ease of Use 910 Tools & Resources 910 Investment Options 1010 Account Options 810.

Get complete access to all kinds of investment options with relatively low pricing from TD Ameritrade. One of its biggest advantages is it requires no minimum deposit to open an account. This is the closest we can find to a perfect online broker. Commission & Fees 810 Customer Service 7.510 Ease of Use 810 Tools & Resources 610 Investment Options 910 Account Options 810. Use Vanguard to get a wide selection of low-cost, no-load mutual funds, ETFs, stock broker services, and financial planning. For investors wanting a one-stop shop for all their banking and financial needs, you'll have to look elsewhere. Commission & Fees 8.510 Customer Service 8.510 Ease of Use 9.510 Tools & Resources 810 Investment Options 810 Account Options 810. E*TRADE, the grandaddy of online discount brokers, is still a good choice for active investors. Its platforms are easy to use, customer service is responsive, and trades execute quickly. However, there are now many less expensive rivals on the market.

Commission & Fees 910 Customer Service 8.510 Ease of Use 8.510 Tools & Resources 8.510 Investment Options 8.510 Account Options 910. Ally Invest is the online brokerage firm of Ally Bank with great pricing and customer service, making it hard to beat. Unfortunately, the funding process can be tricky, taking up to seven days. If you are looking for a local branch office, you'll have to look elsewhere. Commission & Fees 910 Customer Service 8.510 Ease of Use 710 Tools & Resources 910 Investment Options 910 Account Options 7.510. With TradeStation, you can get access to an excellent platform for serious and active traders that was previously available only to brokers. The downsides are that it can be too expensive for some traders, and the service's mobile app is inferior to others. Commission & Fees 8.510 Customer Service 710 Ease of Use 810 Tools & Resources 7.510 Investment Options 8.510 Account Options 8.510. Merrill Edge offers helpful online tools to help investors simplify their financial goals and gain better control over their investments. However, the fees to use the service can be steep, and users have complained about poor customer service and slow updates on trades. Commission & Fees 8.510 Customer Service 810 Ease of Use 7.510 Tools & Resources 7.510 Investment Options 610 Account Options 610. Theme-based Motif Investing is a unique and cost-efficient option for diversifying your portfolio. Its pricing is very competitive, and it's tax efficient, even if you don't trade stocks. But with a lack of advanced features, Motif is not ideal for active traders.

Commission & Fees 8.510 Customer Service 810 Ease of Use 810 Tools & Resources 7.510 Investment Options 810 Account Options 910. Capital One Investing aims to give its users a straightforward, transparent investing experience. While the service is easy to use and no-frills, there are better online brokers with lower fees. Capital One Investing also lacks the various tools that more experienced traders are looking for. Commission & Fees 9.510 Customer Service 6.510 Ease of Use 710 Tools & Resources 810 Investment Options 810 Account Options 710. Firstrade is a discount brokerage firm that charges only $4.95 per trade in commissions. That's one of the lowest fees we've found from an online broker. However, unlike other stock broker options, Firstrade doesn't offer a robo advisor. Commission & Fees 1010 Customer Service 710 Ease of Use 8.510 Tools & Resources 610 Investment Options 610 Account Options 310. With the Robinhood app, yes, you can truly make free stock trades.

The no-frills service targets primarily Millennial investors. The service is easy to use and is limited in functionality. Unfortunately, it web-based service is still in beta. But did we mention it's free? Commission & Fees 610 Customer Service 710 Ease of Use 810 Tools & Resources 810 Investment Options 610 Account Options 610. Use Kapitall to test out any stock market theories with a test account, while learning to hone and simplify your investment method. Commission & Fees 9.510 Customer Service 810 Ease of Use 710 Tools & Resources 7.510 Investment Options 510 Account Options 510. Ustocktrade is an interesting concept, creating a truly community-based investment platform. It may be ideal for new and small investors, as well as early adopters, since the fees are very low and there are no account minimums. However, the service will probably be of very limited use to larger, more sophisticated investors.

Commission & Fees 8.510 Customer Service 710 Ease of Use 7.510 Tools & Resources 710 Investment Options 710 Account Options 810. Active traders are a better fit to SogoTrade's pricing model even if it lacks the features that options traders really need. Commission & Fees 610 Customer Service 810 Ease of Use 810 Tools & Resources 510 Investment Options 310 Account Options 310. Stockpile is a unique stock broker that allows users to purchase small amounts of household-name stocks through gift cards. It's a great way to get young people interested in investing, although the costs can add up. How to Pick the Best Online Stock Broker. There are many factors to consider when choosing an online discount stock broker. Before picking a broker make sure you consider these questions: What are their fees? Is the website easy to use? What methods can you execute a trade? (i. e. web, phone, mobile device) Do they have a local branch office? Do you have access to investment research?

What investment options are available? (ie. stocks, bonds, mutual funds, ETFs, options, forex) It is shown that many investors trade with multiple stock brokers. Each broker run special promotions or offer better deals with such services as commission-free ETFs. So it is recommended to have investments in at least two discount stock brokers. Before signing up, make sure you are clear what fees you’ll pay per trade. In addition, it makes sense to look at your previous trading activity and calculate costs. Will it make sense to move based upon your typical transactions? Is the website easy to use? It might be great that an online discount broker has low commissions, but is the website easy to use? If it’s confusing and it takes ten steps execute a buy or sell a security, why would you use it? What methods can you execute a trade? In today’s connected world, it’s important to have flexibility when trading stocks.

All firms listed allow you to trade online via their website, but not all have the ability to execute trades from a mobile device. Make sure you can not only access your account from your smartphone but also can make trades. Do they have a local branch office? Some investors like speaking face-to-face with their broker. If this is important to you, make sure a local branch office is near your home or place of work. Some brokers offer educational seminars at their office and access to financial advisors. Do you have access to investment research? Have access to investment research via your broker is not only convenient but also can save you money. Purchasing stock and mutual fund research can be very expensive. A discount broker offering the research papers for free is something to consider in reducing your trading expenses. What investment options are available? (ie. stocks, bonds, mutual funds, ETFs, options, forex) Depending upon your skills and expertise, make sure your discount broker has all the features you want. If not, then separate your investment accounts per brokerage for the types of trades you need to do. In some cases, it might be cheaper to keep your bond portfolio with one broker and your stocks at another. Online Broker Comparison List.

Best IRA Promotions for 2017. How to Transfer a Brokerage Account - Without the Grief. Helping make finance easy. Investor Junkie is your shortcut to financial freedom. We know that managing finances is not easy. We analyze and compare tools to help you make the best decisions for your personal financial situation. Subscribe to the Investor Junkie Newsletter. Stay Connected to Investor Junkie. Investor Junkie is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investor Junkie has advertising relationships with some of the offers listed on this website. Investor Junkie does attempt to take a reasonable and good faith approach to maintaining objectivity towards providing referrals that are in the best interest of readers. Investor Junkie strives to keep its information accurate and up to date. The information on Investor Junkie could be different from what you find when visiting a third-party website.

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