A stockbroker is an intermediary that facilitates trading in securities markets transactions, specifically the buying and selling of stocks, ETFs, and other related assets. To trade in securities, you have to open a brokerage account, through which all buy and sell orders will be conducted.
As an investor, you should evaluate different brokers to know whether they fit your objectives based on your investment profile. One of the key considerations to put in place is commission charges. Commissions can cumulatively eat up a significant portion of your returns if not balanced properly.
Below is an analysis of the best brokers to choose from, depending on your plans and visions
Fidelity
Whether you are interested in active trading or investing passively, you can count on Fidelity. One of their attractive aspects is the zero expense ratio, which you will hardly find among well-established brokerage firms. It offers opportunities to invest in mutual funds, stocks, CDs, Initial Public Offering (IPOs), and annuities. Holders of Fidelity accounts have access to 7,000+ETFs and stocks in addition to over 3,400 mutual funds.
Fidelity offers forex trade in sixteen currencies, with 190 currency pairs. The 16 can be traded online, while four are tradeable via a live broker. The sixteen currencies include major currencies like USD, GBP, EUR and JPY.
For passive investors, Fidelity Go will pretty much do the work for you. You will be able to concentrate on other things while your investment is competently managed on your behalf. However, you will have to pay more for the Fidelity Go if your investment is sizable.
EasyMarkets
EasyMarkets provides access to trading in more than two hundred markets, key among them being energy, metals, cryptocurrencies, indices, commodities, and forex. The platforms’ clients outside Europe have three main accounts to choose from, depending on their needs and preference.
First is the Standard Account, whose spreads on the EUR/USD start from 1.9 pips and require a minimum deposit of $100. With this, you will get access to live support technical analysis reports and a personal account manager.
Secondly, there is a Premium account whose EUR/USD spreads start from 1.4 and requires a minimum deposit of $2,000. In addition, the account provides real-time market news, round-the-clock telephone trading support and royalty rebates.
Thirdly, the VIP account has all the features, but its spreads on EUR/USD start from 0.9 pips. The minimum deposit required for the amount is $10,000.
The downside to this site is that it only accepts payments in 12 currencies, and they only accept wire transfers and credit cards.
XM
XM Global trade has the resources you need to trade successfully, regardless of whether you are a beginner or a professional trader. For beginners, you will have access to $100,000 in virtual currency, which you can trade with on your demo account.
Professional traders are provided with MetaTrader 4 for their forex trading needs. With that, they can place their orders, stop losses etc. The spreads on XM.com are quite low and include GBP/USD which starts from 2.1 pips, EUR/USD spread which starts from 1.6 pips and EUR/GBP spreads which start from 2 pips. These are offered on both real and demo accounts and come in various lot sizes.
Oanda
One of Oanda’s strongest selling points is its widespread approval by major regulators. These include the United States’ Commodity Trading Futures Commission and the United Kingdom’s Financial Conduct Authority.
In total, Oanda is authorized by six top-tier (tier-1) regulators, which points to the high level of trust it commands. Oanda’s other strong point is its outstanding market research, with real-time feeds to its MetaTrader 4 platform from sources such as MarketWatch, Reuters, CNBC and MarketPulse.
It also has mobile-enabled trading, through its fxMobile platform, which comes fitted with charting capabilities and more than 30 technical indicators. Oanda’s spreads start from as low as 0.8 pips.
TD Ameritrade
TD Ameritrade goes beyond forex and provides access to other products including Bitcoin futures, options, stock and ETFs. It offers access to 75 currency pairs. Acquired in October 2020 by Charles Schwab, the platform has not changed its mode of operations but had revealed that the transition to full-scale merging with Charles Schwab could take up to 36 months.
TD Ameritrade’s desktop trading is built on an application called Thinkorswim which has several useful tools for professional traders, including for technical analysis, charting, news feeds, backtesting, real-time quotes among others. You can also screen your analysis based on your preferred market filters.
It also has a mobile device support trading platform, with both Android and iOS capabilities. The company also has a customized browser for its mobile trading, known as TD Ameritrade Mobile Web. With this, your mobile trading and analysis are optimized.
FBS
Registered in Cyprus, FBS stands out for its negative balance protection. With this platform, the security of traders’ funds is further enhanced because of the segregation of their funds from the company’s. Therefore, in case the company becomes insolvent, clients’ funds are always safe. FBS has a demo account for beginners and a real account. With both accounts, you get to access the actual market data.
They also have a Cent account, whose risk levels are relatively lower than the Standard account. Therefore, beginners stand a better chance of learning the market using the Cent account. FBS’ spreads are varied and include floating spreads with starts of 0.2 pips, fixed starting at 3 pips and zero pip spreads for VIP accounts (commissions paid).
Webull
Webull exposes investors to options, ADRs, ETFs, stocks, and cryptocurrencies. Its key strengths lie in longer trading hours, access to market data courtesy of Nasdaq, and fees-free options contracts.
Webull offers three main currency pairs namely GBPUSD, EURUSD and EURGBP. The platform has floating spreads for its forex.Therefore the spreads may at times widen to your disadvantage. Similarly, they may narrow to your benefit when the rest of the market spreads are wider.
In addition, Webull also provides market quotes in real-time to its users for free. The other unique features of this platform are margin trading and access to trading in cryptocurrencies. The key weakness in Webull is the limited options in terms of the types of investment available.
Similar to its peers, they do not require minimum account balances. However, they require at least $2,000 for margin trades.
Vanguard
Vanguard’s greatest strength lies in its comparatively cheaper expense ratio. While the average industry charge for 401(K) funds, mutual funds and ETFs stand at 0.45%, Vanguard charges an average of about 0.1%. While these percentages may seem minimal from a superficial view, assessing the implications of such differences over a long period or when the investment portfolio is large can amount to either large savings or losses.
Vanguard offers exposure to forex through its International Bond ETF, with an expense ratio of 0.08%. Its average spread over 60 days is 0.02%. Depending on your account balance, broker-assisted trading will cost you between $0 and $25.
Bottom line
Brokers are unavoidable for investors in securities markets. Your most important consideration when settling an online broker is your investment portfolio and your objectives.
You should also evaluate how much it will cost you to retain a particular broker and compare their charges with the going rates of other competitors. You will also need to weigh your strengths as an investor and whether the packages offered by the broker can help you overcome your limitations.
Read also: How to Invest in Mutual Funds
