How to Choose an Online Stock Broker

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I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

According to a recent survey, investors are most interested in the trade execution, speed, price, website security and equity trading platform when choosing an online stock broker.

Are you looking to invest in the stock market, but are unsure how to choose an online stock broker?

With so many options available, deciding which one is right for you can be overwhelming. We will guide you through the process of selecting an online stock broker and answer any questions you may have to help you make an informed decision.

Key Takeaways
  • Choosing the right online stock broker is crucial for successful investing.
  • Factors to consider when choosing a broker include trading platform features, customer service, security measures and special promotions for new customers.
  • Free tools and educational resources can provide valuable insights and help investors make informed decisions.
  • Special promotions, such as commission-free trades and cash bonuses, can be a bonus for new customers.

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10 Key Factors to Consider Before Choosing a Stock Broker

Whether you’re looking for a new online stock broker or picking one for the first time, there are several factors to consider.

This article will discuss the 10 key factors you should consider when choosing a stock broker. This will help you find the best one for your personal financial goals and investment options.

  1. Commissions and trading fees
  2. Compare fees and features
  3. Account minimum
  4. Track record
  5. Customer support
  6. Account types
  7. Pricing and trade executions
  8. Usability and mobile app
  9. Tools and education
  10. Promotions

Commissions and Trading Fees

One of the critical factors to consider when choosing an online stock broker is the commissions and trading fees they charge. Different brokerages have varying fees depending on the type of investment you make.

Here are the different types of commissions and fees that brokerages charge when it comes to buying and selling stocks:

  • Stocks: Brokerages typically charge a commission to buy, sell and trade stocks, ranging from a flat fee to a percentage of the transaction value.
  • Exchange-traded funds (ETFs): Similar to stocks, brokerages charge a commission for buying and selling ETFs, which can vary depending on the brokerage.
  • Mutual funds: Brokerages charge different fees when it comes to mutual funds, including transaction fees, redemption fees and expense ratios.
  • Options: Brokerages can charge a commission and a per-contract fee for options trading.
  • Bonds: When it comes to bonds, brokerages can charge a markup or markdown on the price of the bond, which is the difference between the purchase price and the sale price.
  • Cryptocurrencies: Brokerages can charge a fee for buying and selling cryptocurrencies, which can vary depending on the exchange.

Some brokerages offer commission-free trades, while others have a low fee structure, so make sure to compare and choose a brokerage that best aligns with your investment goals and budget.

Compare fees and features

Here are a few of the fees and features that you should consider:

  • Commission and trading fees: Look for brokerages with low or no commission fees and low trading fees to minimize your costs and maximize your investment returns.
  • Investment options: Make sure the brokerages offer a wide range of investment options, including stocks, ETFs, mutual funds, options, bonds, and cryptocurrencies.
  • Trading platform: Look for a user-friendly and customizable stock trading platform that allows you to execute trades quickly and easily. Some examples of trading platforms include E*TRADE, Robinhood, and TD Ameritrade.
  • Regulatory compliance: Look for brokerages that reputable financial authorities regulate to protect your investments.

Account Minimum

Account minimums refer to the amount of money that is required to open an investment account with a particular brokerage. Here are some things to look for when it comes to account minimums:

  • Some brokerages require a minimum investment to buy certain securities, such as mutual funds or ETFs. Make sure to check the minimum investment requirements for the investments you’re interested in.
  • You should also check whether a broker charges fees for low balances and determine if the fee is reasonable.
  • Many brokerages offer different types of accounts, such as retirement accounts or education savings accounts, and they each have different account minimums. Choose a brokerage that offers the account type that meets your investment needs.

Consider the growth potential of your investment account with the brokerage. If you plan on investing a small amount initially, choose a brokerage with investment options that offer the potential for significant growth over time.

Track Record

A brokerage firm with a good track record can offer peace of mind and assurance that your investments are in good hands.

Ensure the brokerage firm you’re considering has robust security measures to protect your investments and personal information. For example, look for brokerages that use encryption technology, two-factor authentication and other security measures.

Check whether the Securities Investor Protection Corporation or another insurance provider insures the brokerage firm. Insurance can help protect your investments in case the brokerage firm goes bankrupt or fails.

Reputable financial authorities, such as the Securities and Exchange Commission or the Financial Industry Regulatory Authority, license and regulate brokerage firms with a great track record.

Additionally, you should look for a brokerage firm with a good track record of compliance with financial regulations and industry standards. Don’t forget to read customer reviews to get a better idea of whether the brokerage will meet your needs.

Customer Support

As an investor, you want to know that you can get help when you need it, whether it’s to answer a question, resolve an issue or get technical assistance. So, look for a brokerage firm that offers multiple ways to contact customer support, such as via telephone, email or chat.

Check the firm’s hours of operation and response times to make sure it’s available when you need assistance. Consider the quality of the firm’s customer service, such as the levels of expertise and professionalism.

Account Types

Here are some common account types:

  • Cash accounts: A cash account is a basic brokerage account where you can buy and sell securities with the cash you have deposited. You cannot borrow money to buy securities in a cash account.
  • Margin accounts: A margin account is a type of brokerage account that allows you to borrow money from the broker to buy securities. You’ll need to meet certain eligibility requirements to open a margin account, and there are additional risks and costs associated with margin trading.
  • Joint accounts: Joint accounts are brokerage accounts that two or more people own. Joint accounts can help manage investments with a spouse, family member or business partner.
  • Options trading: If you’re interested in trading options, look for a brokerage firm that offers options trading. Options trading can be complex and risky, so be sure to do your research and make sure you understand the risks involved.
  • Retirement accounts: Many brokerage firms offer retirement accounts, such as traditional IRA or Roth IRA or 401(k) rollover accounts. These accounts offer tax advantages and can help you save and prepare for your retirement.

Pricing and Trade Executions

One aspect to look into is the broker’s pricing structure, including commissions and fees for trades. Some brokers charge a flat rate per trade, while others may charge a percentage of the trade value.

Additionally, some brokers may offer commission-free trades for certain securities or account types. Another important factor to consider is the broker’s trade execution quality, which refers to how quickly and accurately the broker executes trades on behalf of its customers.

A broker with a good trade execution quality will execute trades at the best available price, minimizing slippage and maximizing returns.

It’s also worth noting that some brokers receive payment for order flow, which means that they may receive compensation from third-party firms for directing customer trades to them.

This can create potential conflicts of interest, as brokers may be incentivized to direct trades to firms that offer them the highest payment for order flow, rather than to the firm that offers the best execution quality.

Usability and Mobile App

An easy-to-use website can make it simple for investors to find the information they need, execute trades and manage their accounts. A well-designed online brokerage website can also help investors stay informed about market news and research.

Additionally, having a mobile app can provide convenience and flexibility for investors who want to manage their accounts on the go. A good mobile app should allow you to check your account balance, view your investment portfolio and execute trades from your mobile device.

Some brokers also offer additional features on their mobile app, such as market news alerts and customizable watchlists. When evaluating a broker’s usability and mobile app, it’s important to consider factors such as ease of use, speed and reliability.

A broker’s website and mobile app should be intuitive, user-friendly and have a comprehensive FAQ section.

Tools and Education

Brokerage services that provide free tools and educational resources can help you make better investment decisions.

Educational content can provide valuable information and insights that can help you understand the markets, investment strategies and the risks that are involved in trading.

Free tools, such as market research, charting tools and financial news, can help new investors make informed decisions about their investments.

These tools can provide real-time data and analyses that can help investors identify market trends; monitor their investments, interest rates, online trading, and individual stocks; and make well-informed trades.

In addition, financial advice educational resources, such as webinars, online courses and tutorials, can help individuals learn about the fundamentals of investing and trading, as well as advanced strategies for managing risk and maximizing returns.


Promotions are enticing to beginners and can come in many forms, such as commission-free trades, cash bonuses or free access to premium trading tools.

Commission-free trades can be particularly appealing for investors who are looking to save on trading fees. By eliminating commissions, investors can make more trades without incurring additional costs, which can help them maximize their returns over time.

Cash bonuses, on the other hand, can provide investors with additional funds to invest or trade with. These bonuses are typically awarded after investors meet certain criteria, such as making a minimum deposit or completing a certain number of trades.

Free access to premium trading tools can also be a valuable promotion for investors. These tools include advanced charting software, market research reports and real-time data feeds.

By providing these tools for free, brokers can help investors make more informed trading decisions and ultimately improve their investment performance.

Next Steps

Choosing the right online stock broker is a crucial decision for individuals looking to invest in the stock market.

We discussed the most important factors you should consider when choosing a broker, including trading platform features, customer service, security measures, free tools and educational resources and special promotions for new customers.

The bottom line is that by carefully evaluating these factors and choosing a broker that meets your specific needs, you can improve your chances of success in the stock market.

We encourage readers to take action by researching different brokers, comparing their features and benefits and opening an account with the broker that best suits their personal finance goals and types of investments.

Even online brokers should be interactive brokers that offer hands-on services and provide solid investment advice.


Robinhood has commission-free investing, and tools to help shape your financial future. Sign up and get your first stock free.

We earn a commission if you sign up, at no additional cost to you.

I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

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