Trading in stocks can be a great financial decision. To be successful at it, you need information on the best way to trade, as well as the best brokers to invest your money with.Brokers that have great support services that also make it easy to withdraw and deposit at will. The best stock brokers also provide incentives to trade, and others offer no charges whatsoever for transactions.
Thanks to these platforms you can now own shares in companies like Apple(APPL), Facebook(FB), Netflix(NFLX), Tesla(TSLA) and the list goes on for public companies on the NASDAQ and the NYSE. These stock brokers were selected amongst the best trading platforms in 2021 due to the fact that:
- They allow a trading minimum of $0,
- Most take no charges for transactions
- Some give free stock for your first major deposit (sometimes ranging from $50 and above).
Well, let’s dive right into some basics first.
What Is Stock Exchange
According to Wikipedia, a stock exchange, securities exchange, or bourse is an exchange where stock brokers and traders can buy and sell securities, such as stocks, bonds, and other financial instruments. Stocks may sometimes come with income and dividends according to the company’s terms and conditions. Securities also involve unit trusts, derivatives, pooled investments products and bonds.
Securities traded on a stock exchange include stocks issued by listed companies. Listed companies are verified public companies that have been approved by NASDAQ and NYSE to trade stocks and other securities. If a company is not listed by these two bodies, consider it is a red flag. Traders should also not indulge in any kind of transaction with a company that is not listed.
The Stock exchange is a continuous market with buyers and sellers consummating transactions. This was initially done at a central location such as the floor of the exchange or by using electronic trading platforms. Which you’ll also learn about here.
The Floors Of The Exchange
This is where the exchange of securities took place initially. The method of trading involved a lot of people all on the floor of the exchange making their orders to buy and listing their already bought stocks to sell. The floors of the exchange used were;
The courtyard of the Amsterdam Stock Exchange
Also known as Beurs Van Hendrick De Keyser in Dutch. This was the world’s first formal stock exchange. At that time it was the most modernized way to trade securities in the 1600s.
The New York Stock Exchange
The New York Stock Exchange represented a more improved floor of the exchange. It is located at 11 Wall Street in New York City, and is known to the world’s largest stock exchange per total market capitalization of its listed company. The New York Stock Exchange is your guide to trading securities and if the company is not listed on the NYSE, it is safe to avoid that company.
As stated earlier. To be able to trade a security on any stock exchange, that security must be listed on the NYSE. Initially, the floors of exchange had a record of all securities but now, trade is less linked to a physical place as markets now use electronic communication networks, increasing speed and reducing cost of transactions.
Initial Public Offering
When companies are registered as a Private Limited Company it means that they are not allowed to sell shares as they do not have enough market capitalization amongst other things involved. But when a company is regarded as a Public Liability Company it means that the company has enough market capitalization to go into the stock market and can now sell their shares.
When a company goes from being a Private Limited Company to a Public Liability Company it enlists its initial public offering of its share price (which is how much it is willing to sell each of it stocks). That’s why you hear words like “the company has gone public”.
In clearer terms, an Initial Public Offering (IPO) or stock market launch is a public offering of the value of a company’s share price, which is the price at which it would be sold to institutional investors and also retail investors (you). This officially makes the firm public.
An IPO is listed by one or more financial investment banks. They also make arrangements for the shares to be listed on one or more stock exchanges.
The term “stock broker” is relative and changes respective to location. It is referred to as “Stockbroker/Shareholder Registered Representative in the United States and Canada, and as “Trading Representative” in Singapore. Amongst other names like financial adviser, investment professional etc.
A stock broker is a regulated trader who may provide financial advisory and investment management services, and execute transactions. These transactions include the purchase or sale of stocks and other investments to financial market participants in return for a commission, markup, or fee which could be based on a flat rate, percentage of assets, or hourly rate.
The 10 Best Online Brokers In 2021
Selecting a broker to trust with your money, involves a considerable amount of research. A trader needs to research on the best stock brokers that favours his/her needs. If you plan on making investments in foreign stocks and already have reasonable experience, then maybe you should check out interactive brokers.
If you are a beginner in the trading business, then select a stock broker, open a demo account which allows you to trade with virtual money. And when you are ready, you can put your money where your research and data points.
This is best for mobile traders: With an account minimum of $0 and no fee for transactions made on their site. These platforms feature fundamental and technical analysis tools, that include advanced charting and technical indicators. Over 5,000 stocks can be traded using Webull.
This platform has the “Demo-Account” feature and also allows traders to open a margin account, where you can short stock after depositing a minimum of $2000”. Webull also gives 1 free share of stock for successfully opening an account. The stock is picked at random.
2. TD Ameritrade
This platform is best if you want to research and find trading tools. TD is said to be largest online discount broker. It offers no charges for trading in listed stocks and Exchange Traded Funds (ETFs), as well as mutual funds, futures, bonds, certificates of deposit (CDs) and forex. A TD feature also has the option for your portfolio to be professionally managed if you want. Advanced traders tend to embrace this broker’s extensive research and platform offerings; TD Ameritrade also offers considerable educational resources for new traders.
TradeStation’s trading platforms were not designed for beginners, however new traders can still make use of the features used by advanced traders via TradeStation’s GO account option. The platform’s wide range of asset classes include stocks, bonds, options, mutual funds, futures and crypto currencies.
This platform uses a 0 stock and ETF trades commission system, but options trades cost $0.60 on TD’s Select account and $0.50 on the broker’s GO account. TradeStation offers up 2,000+ mutual funds but they charge a $14.95 commission. As stated earlier this platform is best for advanced traders.
4. Interactive Brokers
Interactive Brokers is an award-winning platform. Their services were designed with professional international traders in mind. Users get up to 24 hours market access each day, for 6 days in a week. Users are allowed to trade in 135 different markets designated to 33 countries using 23 currencies via this broker.
Interactive Brokers request a minimum deposit of $10,000 and also charges fees for inactive accounts. So be active. This platform is best for international traders.
Robinhood allows free trading. They were among the 1st few online brokers to offer this in stocks, ETFs, and options. This platform also allows trading in specific cryptocurrencies through its platform in certain U.S. states. It was created in line with the traditional “robinhood belief” which is “stealing from the rich to give back to society”.
The broker provides a simple and easy user interface, not to mention the mobile application that allows you to access price charts and different trading tools. Novice traders might find this platform best for trading and investing. Other seasoned traders will prefer a platform with varieties of technical analysis indicators and tools.
Although Robinhood requires a high minimum ($2000) for its Robinhood Gold account, the broker also has a standard account that requires no minimum deposit and would be better for beginners with low funds. If you are a beginner this platform was created for you.
MooMoo is a new online stock broker that also runs a commission free trading system. This platform offers customizable tools that will suit investors and traders at all levels.
Moomoo’s trading channels have a better order processing system; this gives it some of the swiftest execution times in the market. This stockbroker also shows Level 2 streaming market data with real time orders that show the depth of the market. This platform is best for intuitive trading.
Moomoo offers new users up to 4 free stocks with a value between $8 and $1,000 that relies on the amount of initial deposit.
E*Trade was one of the first original stock brokers in the market. It also offer commission free trade for stocks and ETFs. E*TRADE’s has web-based trading platforms called E*TRADE and Power E*TRADE. They can both be used on your mobile phone. They also have special features on your desktop computer which is why they are best for web platforms trading.
Everything is changing. Making money online requires understanding the technological trend attached to it. And knowing the 7 best online stock brokers in 2021 can do you no harm, rather, it would bring in more cash.