An online stockbroker can offer many benefits to investors who want to trade in stocks. There is a plethora of online brokerage firms, so choosing just the right one can be more than a little time-consuming. To narrow down a generic search, look for the following qualities in the online stock brokerage firm:
Look for Reasonable Account Minimums
One of the first things consumers look for in an online stockbroker is the account minimum. While some firms may advertise lucrative minimums that may not cost you much, make sure the amount seems reasonable. Generally speaking, the account minimum should be around $1,000 for a decent firm. Any lower, and it becomes unprofitable for the brokerage platform. If you see very low account minimums veering on $100, then be careful of the website.
Excellent Reviews and Praise from Other Users
When it comes down to it, choosing a stock brokerage platform isn’t too different from purchasing any other online product. Good reviews generally indicate a satisfactory product. Therefore, if you want to find the best online stockbrokers, go ahead and read the reviews. Consider this Warrior Trading Review for example, which lists all the pros and cons of using that particular educational brokerage platform. Likewise, read up on the user feedback to learn about various brands and whether any are suited to your needs.
Avoid Account Fees
You may be overpaying if you pay account or subscription fees in addition to commissions. It’s best to choose a stockbroker that doesn’t charge account fees, or only charges a fee for certain transfers. Be aware that some platforms charge users for things they can opt out of. For example, sites may charge for paper statements or prolonged periods of inactivity, which are only optional. If you can opt out of a charge, make sure you explicitly do so to prevent overcharging.
Focus on Education
The most successful stock brokerage platforms also include educational resources. Trading stocks are after all about knowing which companies industries are the most successful. Some platforms, like Warrior Trading, are entirely devoted to educating stock traders. Even if you can’t trade stock, don’t ignore the education opportunities.
Consider Stock Options
The best stockbrokers aren’t actually limited to stocks. In addition to individual stocks, users should have the option to invest in other stock-based financial assets such as mutual funds, exchange-traded funds, and bonds. The well-rounded sites may combine foreign currency trading with regular stock trading as a bonus for users. Obviously, the more options you have, the better the advantages would be for the customer.
Mind Those Commissions
Stockbroker websites make money mainly from commissions. There will be commissions attached to stocks as well as other options. It should be understood well in advance how these commissions work. If the commission per trade is more than $10, then the site may not be worth it.
The most suitable brokerage platforms would have all of the above qualities. Take your time to research so you don’t end up with the wrong site and waste your money.