If you are going to trade stocks through the internet, you might probably want to know how to find the best online stock broker. There are several characteristics for you to look out for when conducting your search, which will be discussed in depth in this article. The recommended place to start your search would be on the internet as there are be many brokerage firms competing to get clients. Whether you are a professional trader or an occasional trader, you should find the best online stock broker to execute your trades with so that you are not disadvantaged. While finding the perfect brokerage firm for you requires some research, here are some characteristics that you should look for when doing your research.
Best Online Stock Broker: Liquidity
To find the best online stock broker, one of the most important things to look for is the brokerage firm's liquidity. This is important to ensure the security of your money. As you would probably hold an account with them to settle your trades, you have to make sure that they have as little debt as possible. You would not want the company to have liquidity issues and go bankrupt with your money. Most people often free ride and leave this checking job to others, but it is better to be safe than sorry. After all, it is your hard earned money that you are dealing with here. This information can be obtained from their annual report, where they have to disclose the amount of debt that they have. You would find that the best online stock broker often have little debt, thus gaining the trust of their clients.
Best Online Stock Broker: Efficiency
Efficiency in carrying out the trade is crucial when trading via the internet. This is because prices jump by the second and if you are slow, you would not be able to execute your trade properly. When looking for the best online stock broker, it is important to take note of how efficient they are when processing your order and executing it. Their efficiency determines whether you are able to buy at the price that you want. You wouldn't want to pay a higher price for a share just because of a delay in submitting your order. You want to have your order executed immediately, and this criterion must be fulfilled by the best online stock broker. This kind of information could be obtained from forums and discussion boards where people offer criticisms or praises of the service they use.
Best Online Stock Broker: Research Tools
The best online stock broker should provide you with tools to assist your trading. Some of the tools that they might offer are charting tools, live streaming quotes and company research. These tools are important to you as a trader, as you would probably make use of them to determine your strategy in the market. You might want to draw trend lines, save chart data or get analysts opinions on companies. It is important to note that although some brokerage firms provide cheap transaction costs, they might not provide research tools for you to use or they might charge you a hefty fee for the tools. The best online stock broker should provide all these extra facilities for free or for a small fee.
Best Online Stock Broker: Customer Service
Customer service is vital when searching for the best online stock broker. They must be able to provide excellent customer service and deal with the problems you face efficiently. You would not want to be calling the company, only to be put through a lengthy operator recorded message and put on hold for a long time. What if you have a trade to make and the system is not functioning? If you have to wait for a long time for customer service to pick up, you might miss an opportunity to earn yourself some money. Some even offer a live chat service, which is excellent when you want to contact customer service as it saves you time so this is something to look for when finding the best online stock broker.
Best Online Stock Broker: Costs
Another aspect to look at when finding the best online stock broker is their cost of trading. Finding out their trading costs will help you decide which company offers trades that are value for money. Some charge a flat rate while some charge a reducing fee if you make a certain number of trades with them in a month. Find a few firms and make a comparison of their transaction cost to determine which suits you better. Set a price which you are willing to pay, and start your search from there. By doing this, you can eliminate those which cost too much, making it easier to make a decision. Keep in mind that the cheapest is not always desirable. Other factors have to be taken into account when choosing the best online stock broker for you.
Best Online Stock Broker: Services offered
Making sure that the brokerage firm offers the service that you need is also important. For example, you might want to trade futures in the market. Not all firms offer this service, so you would have to make sure that the account that you are going to open allows you to trade the shares or derivative that you want. The larger firms often offer more types of services such as share trading, options trading and futures trading. Information on the services that are available is often mentioned in the website of the firm. The level of minimum cash required in your account also differs from firm to firm. The best online stock broker for you would be the one which provides the services that you require.
Best Online Stock Broker: Trading Platform User Friendliness
The trading platform offered by the best online stock broker has to be user friendly. You don't want to spend most of the time looking for the 'buy' button or searching for company information. The user interface has to be easy to navigate so that you can find what you need quicker. Some require you to download software to install while others let you trade through their website. Since mobile trading is becoming increasingly popular, you may even find that some of the top brokerage firms allow you to trade via your iPhone or Android phone.
From the things covered in this article, there are many considerations to take into account when choosing the best online stock broker. Proper research has to be done before committing to one, or else it might cause a hassle if you were to change your mind later on. Another great tip to look at is the awards that the brokerage firm has won, which would probably be published on their website or through advertisements in newspapers and also brokerage firm reviews. Based on all this information, you should be able to find the best online stock broker for you.