For stock market investors of all stripes, the news about online brokers couldn't be better. Competition for your business is stiff, leading to low prices, extra services, lots of choices and perks previously reserved for high rollers. And in some cases, online brokers and online stock trading services are even being offered free (at major banks including Wells Fargo and Bank of America)!
Online brokers come in many varieties. In fact, every brokerage firm offers online capabilities, including the full-service firms that offer advice, proprietary research and other services for a fee. There are also discount and deep-discount firms with per-trade costs as low as $5.
It's all a matter of personal fit. What are you comfortable with? Do you want a live person to deal with if needed, and the (relative) safety of a major brokerage firm name (Merrill Lynch comes to mind)? Or is a firm offering basic online trading tools at the lowest possible price what you're after? Maybe it's something in-between -- an online brokerage firm with discount prices, but which also provides a wide range of other account services and stock research, too.
Yet another choice is to establish an investment account with online stock trading capabilities through a bank (maybe your current bank), allowing you to keep your money all in one convenient location. It's your choice. Here's how to get it done:
Action Steps
The best contacts and resources to help you get it done
Compare online brokers and brokerage services
These days, with online trading prices at rock bottom, the real battle is over additional services the online brokers can offer.
I recommend: Investing Online Resources Center (IORC), an independent, non-commercial investor education organization, has links to independent rankings, service comparisons and features of online brokerage firms from places such as
Smart Money magazine and
JD Power. Take IORC's
quiz to find out if online investing is right for you. Or see their
tutorial on signing up for an online broker account.
Pick your online broker account and sign up
Check prices, features and available research at several different online stock trading firms.
I recommend: To keep your finances in one place, try online broker accounts and services at your bank. Not all banks offer online brokerage account services. A few that do include majors like
Citibank,
Wells Fargo,
Bank of America,
Chase,
Wachovia and others. Discount or "premium discount" brokers, including
Charles Schwab,
Ameritrade,
Scottrade,
TradeKing, FirstTrade and
eTrade can all provide the online trading accounts and tools you need to buy and sell stocks with low commissions. Full service firms for online stock trading include big names like
Merrill Lynch,
Edward Jones,
Morgan Stanley and
A.G. Edwards.
Inform yourself with online stock trading advice
The more knowledge you acquire about online stock trading, the better your chances of success.
I recommend: Market information sites such as
CNBC,
MarketWatch and
Yahoo! Finance have a broad range of helpful information and tools helpful for online stock trading.
Morningstar is an "A-List" provider of independent research for individual investors (as well as financial advisors and institutions), including a variety of stock and mutual fund publications, websites and software. Brokerage firm customers get access to stock research and tools that vary greatly by firm. Leading discount broker
Charles Schwab, for example, functions more like a full-service firm by providing stock research and trading recommendations. Their "
Active Trader" service offers a series of advanced stock trading tools, including software, data, proprietary research and specialized support.
TechniTrader and
Investools are among the independent firms offering stock trading education, tools and strategies.
Value Line is also an excellent source of stock trading information, as are
Better Investing and
PowerRatings.
See our other stock investing How-To Guides
How-To Guides on Work.com and Business.com can help you locate all the tools and resources you need to be successful at investing in stocks.
I recommend: Other top-rated How-To Guides on successful stock market investing include:
Stock Trading: Success in both bull and bear markets;
Stock Quotes: Free online stock quote services abound. And add-ons can dazzle; and
Stocks (Equities) and Stock Investing.
The official source of Online Brokers is the Online Brokers page at Business.com
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