6 Best Trading Platforms & Online Brokers for US Traders [2024] (2024)

Good to know:

• Stocks, ETFs, and OTCBB trades are commission-free.

• And so is robo-advisory services.

• Broker-assisted trades set you back at $32.95.

• Options contracts are priced at $0.65, with no caps.

Why we chose it:

Bringing together discount broker costs and the wide range of services, Fidelity is perhaps the closest thing to eating the cake and having it too.

Besides low-cost investing, the platform’s extensive services on financial planning and in-depth, thorough research and analysis tools resonate with both novice and seasoned traders alike.

The screeners take the top spot among the many research and analysis tools compared to the competition. You can use dozens of filters (100s for stocks and ETFs) to refine your search for any asset class included. Subtle touches like being able to filter ETFs that include a specific stock among their investments and thematic filtering options render the tools evermore powerful. The research department is further topped up with access to third-party publications and Fidelity’s analyst-penned insights.

There are three products in total – a web platform, a downloadable Active Trader Pro, and a mobile app. The primary web platform comes with easier navigation and comprises all fundamental tools within Fidelity’s offering. You’ll probably want to swing towards Active Trader Pro if you’re a more active or seasoned trader with extended features like real-time analytics and conditional orders. In terms of customization, and the quality and quantity of features, Active Trader Pro edges close to IBKR, but it’s much more streamlined in its navigation.

Fidelity’s holistic approach also sets the company aside from the competition. By activating Full View, you can monitor your financial life in its entirety from a single portal by integrating Fidelity and non-Fidelity account details, like your investment accounts elsewhere or credit card accounts. In addition, you can pair your monitoring with in-built budgeting and goal-setting tools to get a hold of your financial planning.

Where it falls short:

As good as it is, Fidelity has a crucial gap in its offerings that particularly hurt its appeal to advanced traders. The platform currently doesn’t support futures, commodities, or cryptocurrency trading, and options trading fees are relatively high. For example, an options contract sets you back at $0.65 for both opening and closing, and it's not capped per leg. For comparison, tastytrade (formerly tastyworks) charges $1 per contract, comes with no closing fee, and charges are capped at $10 per leg.

Good to know:

• There are no commissions for stock, ETF, or options trading.

• Cryptocurrency trading incurs a 1% fee.

• There’s a $10 inactivity fee if your account lies dormant for over a year.

• The minimum deposit requirement is $50.

Why we chose it:

eToro was one of the pioneers of social trading: in 2010, the firm created one of the earliest examples of social trading networks, called OpenBook, where novice traders can communicate and learn from more seasoned traders. As the platform grew and added a variety of assets into its offerings, it integrated social trading capabilities within its flagship product.

Today, social trading sits at the center of eToro’s service. You can easily find and filter traders based on their risk profile, average returns, or preferred assets, add them to your watchlist along with assets and portfolios, and, thanks to its key feature CopyTrader, automatically copy their portfolios along the way. The experience is incredibly interactive: social feeds are included in every investor profile and asset page, like stocks, cryptocurrencies, or commodities, and everybody is welcome to create posts or polls and comment on others.

Due to this unique focus, eToro’s platform feels closer to a social media platform than your average online trading platform. As a result, the trading experience is streamlined as much as possible – it is intuitive and easy to navigate, the order ticket is robust and easy to configure, and asset pages include integrated news feed and analysis pieces, charts, and past performance statistics.

Where it falls short:

eToro’s usability primarily lies in its simplicity – not in a good way. The platform misses out on some crucial elements like a traditional screener and more advanced features like advanced charting or futures trading, which hurts the platform’s appeal to traders that are above the intermediate level. E*Trade offers a comparable user experience and allows more room for advancing with tools that go beyond basic trading mechanisms – but lack social trading functionalities.

Good to know:

• You can only trade forex with IG in the US.

  See Also

  Best Online Brokers And Trading Platforms Of March 2024Best Forex Trading Platforms For US Traders [Updated 2024]9 Best Online Trading Platforms In March 2024 | BankrateBest Trading Platforms in the US 2024 - Investing.com

• The account minimum is $250.

• Spreads start from 0.6 pips on major currencies.

Why we chose it:

Due to the strict regulatory environment, it’s not possible to find a lot of reputable and accessible forex brokersavailable in the US. TD Ameritrade comes close regarding the caliber of platform quality and feature versatility. Yet, it can’t quite match IG’s extensive offering of over 80 currency pairs – nor its competitive spreads that start from 0.6 pips.

While the US platform is still feature-rich compared to competitors like Oanda or Forex.com, it is more simplistic than its international counterparts, most notably the UK product. Yet, it covers all the bases, including basic risk management tools like stop-loss orders, news streaming services from Reuters, and charting capabilities topped up with Autochartist integration, a third-party pattern recognition program.

One thing that sets IG apart is its commitment to client education: the IG academy, not though quite at thinkorswim’s level, offers some of the most comprehensive educational bundles available across the industry. Courses cover everything from the basics of forex trading to more advanced strategies; with full-fledged courses and interactive elements, it resonates with users from all backgrounds.

The firm also operates the DailyFX website, which provides comprehensive news and research covering all major currency pairs penned by in-house analysts. Within the trading strategies section, you can create buy and sell signals, view analysts' picks, and a variety of technical data to help build your strategy – education, and research departments are where IG’s over four decades of experience really shine.

Where it falls short:

The obvious drawback with IG is that it only offers forex trading to US-based investors. Thus, leaving out stocks, bonds, commodities, ETFs, and many other assets available for traders in other markets –your best bet for a more rounded trading experience that includes forex is either TD Ameritrade or Fidelity. Ultimately, IG is an excellent choice for forex trading, but that’s about it.

The regional changes spill over to other functionalities as well: the UK traders, for example, benefit from superior risk management tools like FCA-backed negative balance protection (so you may end up in debt to the broker) or guaranteed stop-loss orders, whereas US traders don’t even get FPIC protection.

Good to know:

• Stock and ETF trades are commission-free.

• The live broker fee is $25 for all asset classes.

• OTCBB trades incur a commission of $6.95 per transaction.

Why we chose it:

TD Ameritrade’s commitment to client education is nearly unparalleled. The Immersive Curriculum brings together eToro Academy’s bottom-to-up built, multi-media approach and IG’s full-fledged, interactive course design and takes it up a nudge with a personalized touch.

The learning process is tailored from the start. Upon registering, you are asked about your goals, ranging from learning the essentials to building a retirement plan or a diversified portfolio, and other questions regarding your personal circ*mstances. Vis-a-vis your goals and account history, you are recommended a tailored plan to follow, which adjusts itself as you advance your knowledge – it’s almost odd that this service is completely free-of-charge.

TD’s flagship platform, thinkorswim, is also designed for traders with a range of trading levels. The platform is both feature-rich and intuitive, making it great for starters, as you will have access to more advanced features as you expand your knowledge. In addition, you will find it packed with stock and ETF screeners, research insights, and trading idea generators, all of which are invaluable for understanding your investment options as a beginner.

Where it falls short:

With no balance minimums, TD’s entry barrier is already low but could have been lower had it offered fractional shares (a slice of a share based on a dollar amount, imagine you are buying a share of Tesla for a dollar). You can find fractional shares among Charles Schwab’s offerings, which present comparable usability but lags in educational materials.

TD’s services could have also been rounded up with an innovative social trading portal (offered mainly by new-generation solutions, most notably eToro) that connects the platform’s massive 11 million users and allows exchanging tips and ideas.

Good to know:

• Lite account offers commission-free US equity and ETF trading.

• Pro account charges $0.0005 to $0.0035 per share for all stock and ETF trades, but it decreases as the volume increases.

• Margin rates range from 4.83% to 6.83%.

Why we chose it:

Interactive Brokers is an excellent choice for those looking for a professional-grade, customizable, feature-rich trading platform. As a global powerhouse, IBKR offers more investment options than you can ask for, including stocks, ETFs, futures, options, cryptocurrencies, bonds, mutual funds, and hedge funds across 150 global markets.

The traders are given the just-right arsenal to act on the opportunities they are presented. Its native charting feature includes up to 120 technical indicators and an extensive suite of drawing tools. In addition, you will receive screeners for stocks, ETFs, mutual funds, and bonds, all of which come with in-built trading idea generators. For more, you can also use IBKR Market Signals or third-party news and analysis services like Benzinga or Capitalise.

There are two account types you can go for: IBKR Lite and IBKR Pro. Pro users get more research and analysis tools, but most notably, they can access IB’s highly appreciated SmartRouting functionality. With SmartRouting, all your trades are automatically routed to the lowest-cost exchange – as execution mechanisms get poorer in quality across the industry, this is a chef’s kiss addition for advanced traders.

Pro users forgo commission-free trading and are given a pricing structure that gets more competitive as the volume increases – this essentially makes up IBKR’s appeal for active and stock day tradersin particular.

Where it falls short:

Simplicity does not exist in IBKR’s vocabulary. The sheer number of moving parts renders the platform extremely hard to navigate for untrained users – but that’s just a product of their philosophy of serving in-depth research and analytical tools. But, of course, to each their own. Seasoned traders looking for a comparable platform with functionalities but a gentler learning curve (and willing to scale down on investment opportunities) may appreciate E*Trade more.

Good to know:

• There are no commissions on stock, ETF, or options trading.

• You can buy fractional shares – but there’s a $5 minimum.

• Margin rates range from 9.49% to 5.49%.

Why we chose it:

Webull is hardly the best broker you can find out there – it lacks some advanced yet crucial tools like trailing stop-loss orders and, as a discount broker, many portfolio management features. But is it cheap? Definitely. How about the mobile experience? Superb. The mobile app has been downloaded over 10 million times by Android users, snapped a 4.7/5 rating from iOS users, and receives frequent performance improvements (three times a month on average).

There’s enough evidence to conclude that the mobile product is prioritized in development as user feedback varies greatly regarding the experience on different devices. The app includes all bells and whistles required for active trading, and, included on the desktop app: robust stock and options screeners, mobile-optimized charting (through which you can open positions directly and create alerts), and an integrated news feed.

Where it falls short:

As we said before, Webull is a discount broker – so don’t expect to get a full-fledged portfolio management system and access to a financial advisor when required, compared to a full-service brokerage like Fidelity.

It’s also worth noting that the low fees are compensated by different means: like many discount brokers, Webull also relies on payment for order flow (PFOF) to make up for the lack of trading commissions, which results in poorer trade execution. This is particularly painful for day traders, who rely on top-notch order execution – which they can find with Interactive Brokers’ highly appreciated SmartRouting functionality.

How do discount brokers make up for the money they lose on commissions?

More and more trading platforms are moving away from commission-based trading and finding new ways to compensate for it. Payment for order flow (PFOF) is one of the most common ways: platforms typically route orders for execution to a particular exchange, and in return, they gain a small fee. Why should you care? Because it results in poorer execution quality as the order is not routed to the most optimal exchange. It's basically a tradeoff between cost and quality.

What are options and futures?

Options and futures are derivative products that derive value from underlying assets. In essence, both represent a contract allowing you to buy or sell an asset, like stocks or commodities, at a specified price, by a designated date.

The main difference is that an options contract gives you the right, but not the obligation, to buy or sell an asset at a specified price by a certain date. Conversely, when you enter a futures contract, you must buy or sell the underlying asset at a specific price by a certain date unless the position is closed.

Both options and futures contracts are leveraged products. Leverage refers to borrowed money that can increase your buying power. If you open a trade with $100 and 20x leverage, for example, it will equate to $2000 in investment. The platforms lend you the money to increase your bid, and if your bet pans out, your returns are magnified. Yet, if your bet is not realized, so will your losses. Trading platforms offer much higher leverages for options and futures contracts, which already have complex mechanisms. These all make futures and options incredibly risky.

But of course, different strokes for different folks – if you are interested in options trading, check our guide.

Fundamental vs Technical Analysis

When making trading decisions, there are two distinct approaches to understanding financial markets: fundamental analysis and technical analysis. The industry news and company fundamentals we discussed above create the basis for fundamental analysis: it primarily studies companies' overall economy, industry conditions, and financial health to predict price movements. The chief aim is to gauge the intrinsic value of a stock.

The other camp is technical analysis, where analytical tools like charts factor in. Traders using technical analysis focus on statistical trends like the movement of an asset’s price and volume over time. They believe that all fundamental information will be factored into the price. Technical analysts don’t bother to understand the intrinsic value of a stock. Instead, they focus on identifying patterns and trends in its past performance, which they believe signal what a stock will do in the future.

How much money do I need to start trading?

This primarily depends on your account minimum requirements (which vary from none to $500 for standard accounts), the type of security you wish to buy, and the frequency of your trades. But above all, it depends on your situation. The rule of thumb is never to trade with more than you can lose to afford. Before understanding the optimal limit, you should take a financial snapshot and see how much you can dedicate without dipping into your income designated for necessary purchases or savings.

If the price of the asset and account minimums allow it, you can start with an amount as low as $100 – but trading with such small capital is not generally advised.

Let's say you decide to invest your hundred bucks in a single stock. The stock initially seems to be doing well, and you manage to earn a 10% return on your investment, bringing your total capital to $110. However, shortly after, the stock experiences a sharp decline, and you lose 10% of your investment, bringing your total capital back down to $99.

In this scenario, even though you made a profitable trade at first, a single loss wiped out most of your gains. With a larger capital base, you would have more cushion to absorb losses and potentially recover from them. With a small capital, you have a limited margin for error and not enough resources to diversify.

And finally, the frequency issue: if you wish to place four or more trades a day or simply become a day trader, you need to have a staggering $25,000 in your account as FINRA then designates you a ‘pattern day trader.’

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