Best Stock Trading Platforms for Day Trading and The Best Online Brokers for Stock Trading
The Best Trading Platforms
If you’re looking to trade stocks online, you’ll need a trading platform that’s fast, low-cost, and provides the right data to help you make the best investing decisions.
To help you find the perfect fit for your financial goals, we’ve compiled the best online trading platforms in this guide.
Best Trading Platform Overall: E*TRADE
Since 1991, E*TRADE has been the go-to trading platform for retail and professional investors alike. Designed with active traders in mind, the platform equips users with access to stocks, options, futures, ETFs, mutual funds, bonds, and CDs.
E*TRADE is a low-cost broker that offers $0 commission trades on stocks and ETFs (as well as $0.65 options contracts). They have 24/7 support over phone, chat, and email to assist with any issues.
E*TRADE provides its own professional research, as well as reports from Thomson Reuters and Moody’s to help investors make the most informed investing decisions.
With a powerful trading platform and mobile app (Power E*TRADE), your trading tools and research are available at your fingertips.
Trading Fees: $0 for Stocks and ETFs, $0.65 options per contract
The Best Trading Platform for Beginners
Fidelity is a user-friendly broker that focuses on the education of its customers. Using the Fidelity app, beginners can start investing with $0 minimums – and no fees for ETFs and stock trades. Beginners can also purchase fractional share trades if they can’t afford the full share price.
The Fidelity Mobile app gives investors a simple layout and user-friendly access to stocks, bonds, ETFs, options trading and more. The company also offers after-hours trading – and even a digital notebook for taking personal notes on trades.
Their full-featured online app, Active Trader Pro, provides a full suite of professional trading tools, analysis, and real-time pricing. As beginners venture into more advanced trading, Fidelity has all the tools needed for even the most active day trader.
Trading Fees: $0 for Stocks and ETFs, $0.65 options per contract.
The Best Online Trading Platforms for Day Trading
Whether you’re a casual investor looking to trade a few times a week or a Pattern Day Trader (PDT) looking to maximize profits, the best platform will help you succeed. Here are the top trading platforms for day traders:
thinkorswim by TD Ameritrade
Offered by TD Ameritrade, the thinkorswim platform grants a full suite of research and investing tools to day traders. From virtual trading with pretend money to backtesting to advanced earnings analysis, you can do it all on this platform.
The thinkorswim platform also provides access to over 400 chart indicators and 400+ technical studies, satisfying even the most seasoned day trader.
Both the desktop and mobile app save your preferences, so your mobile trading experience mirrors whatever you do on the computer. Whether you’re executing an options trade or watching Trader TV to stay up-to-date on the markets, thinkorswim gives you the ability to trade anywhere.
Trading Fees: $0 for Stocks and ETFs, $0.65 options per contract. $6.95 flat-rate fee for penny stocks.
Tradestation is a powerful desktop and mobile trading platform with access to stocks, ETFs, options, and futures trading. Its charting features over 250 indicators (which can be customized) and access to over 40 years of historical market data.
Tradestation’s mobile app allows you to continue trading on the go, including charts with over 40 indications, order visibility, and watch lists.
TS Select Trading Fees: TS Select: $2,000 minimum, $0 stock and ETF trades, 0.60$ options per contract.
TS Go Trading Fees: $0 minimum, $0 stock and ETF trades, and $0.50 options per contract.
Trader Workstation by Interactive Brokers
With low margin rates and over 60 order types, Interactive Brokers offers a powerful desktop trading platform aimed at professionals. A favorite of institutional trading companies, Trader Workstation provides users with access to almost every type of trade imaginable, including equities, options, futures, forex, and even algorithmic trading.
Interactive Brokers is also the best broker for international trading, with access to over 130 global markets in over 30 countries.
If you’re a professional trader looking for the industry’s best trading tools – all on one platform – look no further than Trader Workstation by Interactive Brokers.
Note: Interactive Brokers requires a minimum $110,000 deposit for margin accounts.
IBKR Lite Trading Fees: $0 stock and ETF trades. Option prices vary from $0.25 - $0.65 per contract.
IBKR Pro Trading Fees: $.005 per share stocks and ETFs, with a minimum of $1.00 (max 0.5% of trade value). Option prices vary from $0.25 - $0.65 per contract.
The Best Trading App
The thinkorswim mobile app (from TD Ameritrade) provides investors with easy access to powerful tools, analysis, and research. Investors have the ability to trade futures, forex, and advanced options, making thinkorswim the most comprehensive trading app on the market.
TD Ameritrade is also known for its extensive research, offering users access to studies from over 14 providers, as well as 300+ technical charts for review.
For people looking to dip their toes into day trading without risking their own funds, the thinkorswim app grants users access to a paperMoney account with $100,000 in virtual funds to practice trading with.
Whether you’re a beginner investor or professional day trader, the thinkorswim app puts access to the best trading tools and charts right in the palm of your hand.
Trading Fees: $0 for Stocks and ETFs, $0.65 options per contract. $6.95 flat-rate fee for penny stocks.
The Best Online Brokers for Stock Trading
If you’re looking to trade stocks, our favorite brokers will help you get started.
With their aforementioned thinkorswim app, top-notch research, and bountiful education library, TD Ameritrade is our top-rated broker for stock trading. Whether you’re looking to day trade stocks actively or simply want to purchase stocks from your mobile phone, TD Ameritrade has you covered.
Trading Fees: $0 stock and ETF trades.
Charles Schwab is a mainstay broker with a robust trading platform that satisfies even the most active stock trader. To help make smarter trades, their StreetSmart Edge desktop app allows access to real-time charts, analysis, and proprietary research.
Schwab also offers a simple web-based trading platform for beginners who simply want to buy and sell stocks. Casual investors can find simple charting, live quotes, and even the ability to purchase stock slices (partial stocks) on Trade Source.
Trading Fees: $0 stock and ETF trades.
The Best Online Brokers for Options Trading
Interested in options trading? These top online brokers are designed with your needs in mind.
Designed by the thinkorswim platform (now owned by TD Ameritrade), Tastyworks is an exciting newcomer to the online broker space. Designed specifically for trading derivatives, their specific tools and charts also make it easy to find the best options trades.
Tastyworks’ desktop, mobile, and web-based platforms offer extremely similar functionality, keeping you connected wherever you are – and on any device.
The team also has a live broadcast called Tastytrade, which is focused on active retail options traders. Be sure to check out the live stream option on the Tastyworks platform.
Trading Fees: $0 stock and ETF trades. Options trades are $1 to open and $0 to close.
Via their Power E*TRADE platform, options traders have their favorite tools right at their fingertips. From watch lists to scanning tools to position grouping, options traders will feel right at home on this platform.
As their software has been designed to guide new investors through the process, Power E*TRADE is also great for beginner options traders. Helpful hints pop up throughout the trading process – and emojis help indicate the outcome you’re looking for.
Trading Fees: $0 fees for Stocks and ETFs, $0.65 options per contract
Which Trading Account Should I Open?
Choosing the right trading account depends on your goals. Are you looking to actively trade for profit or pick a few of your favorite stocks? Will you be day trading on margin? Are you interested in trading options contracts?
For most traders, opening a standard brokerage account provides the most flexibility in regards to active trading. Compare the brokers we’ve reviewed above to find one that fits your trading style.
If you’re looking to pick stocks within a retirement account, you’ll most likely do this within an IRA account. IRAs typically have access to more investment options than employer-sponsored retirement accounts.
No matter what account you choose, always compare online brokers to find the best fit for your financial goals.
What to Watch Out for When Reviewing Trading Platforms and Apps
When choosing a trading platform, always be aware of the costs involved in your preferred type of trading.
If you want to actively trade stocks, make sure your platform doesn’t charge you for each trade. Some platforms still charge a fee for every transaction (which quickly adds up if you do high-volume trading). The same goes for options and futures contracts, as some brokers charge per-leg fees.
When researching any stock trading app, make sure they’re SIPC-insured and backed by a legitimate broker. Depositing money into any uninsured app puts all of your money at risk.
Back to Basics: How Trading Works
In simplified terms, trading involves the buying or selling of a security (such as a stock, bond, or commodity). These trades are handled through a broker which matches buyers and sellers to execute a trade. Many of these transactions now happen electronically but some are still handled manually on the trading floor.
Most trades happen when the stock markets are open (i.e. weekdays between 9:30am - 4:00pm EST, excluding federal holidays). There are ways to trade after hours through electronic communication networks (ECNs), but not all brokers provide this capability.
Steps Needed for a Successful Trade
- A buyer submits a request through their broker to purchase a stock at $100 (this is the bid price).
- The broker finds a party looking to sell their shares at $100 (this is the ask price).
- The broker executes the deal, sending a confirmation to the buyer that their trade was successful.
- The transaction is subject to a fund settlement period before it is completed, which is T+2 business days.
Stock Trading vs. Day Trading
Stock trading is sometimes referred to as day trading, but they aren’t the same thing. Stock trading is the act of buying and selling stocks for profit, while day trading can also include other securities (e.g. bonds, commodities, FOREX).
The goal of both, however, is to purchase a security at a low price and quickly sell for a profit. Often, ths happens several times within the same day.
Options Trading vs. Day Trading
Day trading involves buying and selling the same security on the same day – sometimes several times per day. This allows traders to take advantage of price fluctuations, with the goal of buying low and selling high to make a quick profit.
Options trading, however, entails the purchase and sale of options contracts.
An options contract is an agreement between a buyer and seller which gives the buyer the right to buy or sell a particular asset at a later date (expiration date) and at an agreed-upon price (strike price).
This can be lucrative if investors correctly predict which way prices will go for a particular security. If prices don’t go the way they want, investors simply pay the contract premium and don’t exercise their contract.
Swing trading is a strategy where traders use technical analysis to buy and sell stocks that have an anticipated upward or downward move. The goal is to capture a piece of the price movement as profit. These trades are typically bought and sold within a few weeks (at most).
Swing trading involves entering short or long positions. A long position means that the investor owns the shares of the stock in anticipation of it going up in value over the short-term. A short position, however, means the investor owes these shares to someone (typically their broker) but can buy them at a lower price if the stock drops in price.
Swing trading is extremely risky and isn’t recommended for most investors: You can quickly lose money if the stock doesn’t move the way you anticipate.
Forex is the act of converting one currency into another. Since global currencies can fluctuate in price quickly, forex traders look to profit from the changes in the price of each currency. These trades don’t happen on centralized exchanges but rather through banks, dealers, and brokers which specialize in forex trading.
Why Trading Forex Is So Difficult
Forex is global, meaning that trading can happen 24 hours a day, 5 days a week. Wild swings in price are possible overnight, potentially losing money while investors sleep. External factors (like interest rates, inflation, government policy, and import/export demand) can also have a major influence on the price of currencies.
These are just a few risks that make forex trading a difficult investment for beginners.
Can Trading Make You Rich?
Trading securities involves heavy speculation in how a particular company or asset will perform in the future. While trading can be very profitable in the short-term, to be successful, it requires research, discipline, and access to the right tools.
Over the long term, active trading typically doesn’t outperform the market averages they’re competing against. For example: When investors are looking to trade stocks, most are trying to outperform the respective stock indices like the S&P 500. Over the past five years, almost 78% of fund managers (who actively trade funds) underperformed versus the S&P 500 index, according to SPIVA.
Trading stocks has a chance of making you wealthy – but it also carries the risk of losing you money quickly, too.
A Few Helpful Tips for New Traders
If you’re new to trading, it can feel overwhelming. Follow these guidelines as you dip your toes into the trading world:
1. Ensure Your Personal Finances Are in Order
Before you start trading stocks, make sure your financial situation is in order. You should be saving money each month, have no credit card debt, and be investing in your retirement accounts consistently. You also need a healthy emergency fund of at least 3-6 months of expenses.
Once you’ve built a solid financial foundation, you can start venturing into trading.
2. Consistently Invest in Your Retirement Accounts
If you aren’t investing in your work retirement plan or an individual retirement account (IRA), you shouldn’t be trading just yet. Investing early (and often) into your tax advantaged retirement accounts will help you take advantage of the power of compound interest.
If your work retirement plan – like a 401(k) – has a company match, always take advantage of that first. Then look at maxing out an IRA account. Funding each of these accounts every year will help you prepare for retirement.
3. Set a Trading Budget
Setting aside a specific amount of money for trading helps you avoid risking too much and hurting yourself financially. Before you start buying and selling, put together a monthly budget to know exactly how much you can afford to trade.
Give yourself strict rules around trading and don’t allow yourself to go over budget.
4. Be Prepared to Lose All of Your Money
Don’t “YOLO” your life savings into the next hot stock unless you are willing to lose it all. Trading securities has the risk of loss, including investing in something that could lose all of its value.
The risk is even greater with options and futures contracts, so make sure whatever amount you invest, you’re willing to walk away with a $0 balance.
5. NEVER Suggest This to Your Grandparents
Day trading takes research, skill, and excess capital to succeed. Don’t tell anyone to risk their retirement trying to chase gains. Unless your grandparents have tons of excess money to burn, day trading is far too risky.
Most retirees need to focus on capital preservation and invest in stable income instruments.
Investment Types for New or Risk Averse Investors
If you are new to investing – or simply don’t want to take on too much risk – there are a few alternate investing strategies that may be better.
Passive Mutual Funds
A mutual fund is a collection of stocks, bonds, or other securities that give you exposure to more than just a single security. These funds can hold hundreds of different securities within them, providing the potential for better diversification.
Mutual funds that are passively managed typically have lower fees and follow specific indices (such as the S&P 500). Year-over-year, they also outperform most actively-managed funds, endowing investors with confidence in their long-term viability. If you want to invest in a simple, diversified fund, a passively-managed mutual fund may be a great option.
Dividend Paying Stocks
Another popular way to invest is looking for stocks that pay a dividend to their investors on a quarterly basis. Stocks that pay a dividend are usually large-cap, world-class brands which provide stability and long-term growth to their investors.
Major companies like Microsoft, Chevron, AT&T, and Clorox pay out dividends to their shareholders as an incentive to hold their investment. Since these companies are massive, investing in them is typically seen as less risky than investing in smaller cap companies that don’t pay a dividend.
Designed by Jack Bogle and the Vanguard group in the 1970s, index funds are a group of securities that own every asset within a respective index. They were created to provide investors with a low-cost option to get market-average returns.
The S&P 500 index fund, for example, owns all 500 publicly-traded companies that fall within that index. As companies drop from the index – or new ones are added – the index fund follows suit.
Index funds are also known for their extremely low fees, helping investors keep more of their returns.
Exchange traded funds (ETFs) are similar to mutual and index funds in that they hold a basket of securities within them. In fact, many mutual and index funds have an ETF equivalent that exactly mirror their holdings.
ETFs, however, can be purchased at the price of one share, and can be bought and sold at any time during market hours, while mutual funds are traded at close-of-market pricing. Since mutual and index funds typically have minimum investment amounts, ETFs give beginner investors access to these funds at a lower price.
If you want to diversify your investments across several funds for a lower price, consider investing in ETFs.
Bonds are seen as a more stable investment than stocks or other securities.
If you’re risk averse (or simply looking to preserve your capital), allocating money to bonds can help you diversify your holdings and “smooth the ride” of investing for the long-term. Though bonds are typically less volatile than stocks, historically, they’ve provided much lower returns.
Ask An Expert About Trading
Who Makes The Trading Rules?
The Securities and Exchange Commission (SEC) regulates the securities trading industry by creating and enforcing rules around trading securities for US citizens. Established in 1934 after the Great Depression, the SEC protects investors from financial harm due to things like insider trading, accounting fraud, and market manipulation.
For day traders, the SEC has specifically outlined margin requirements for investors who trade in and out of securities on a daily basis. If you buy and sell a security 4+ times within five business days, you’re subject to hold a minimum of $25,000 in a margin account (and are considered a pattern day trader).
Can Trading Put You in Debt?
Yes. If you use margin when trading securities, you’re technically borrowing money (i.e. incurring debt). If you’re buying or selling naked options and things go south, you’re on the hook for buying or selling the losing shares. Purchasing those shares at a loss may mean using margin or other borrowed funds to pay for them.
Why Is Trading Harder Than Other Investment Strategies?
Trading requires an intimate knowledge of the markets, segments, asset classes, and companies you’re investing in. It also requires deep research and technical analysis to find great trades.
On the other hand, passive investing strategies – such as dollar cost averaging into index funds – is simple to execute and can even be automated.
Beating the stock market every year requires great discipline (and a little bit of luck). It’s possible to make a lot of money from trading, but for most investors, passive investing is a simpler (and more profitable) approach.