new-recommended-broker-banner new-recommended-broker-banner

Best Online Stock Brokers

Updated: 15 December 2020
1st

eToro

Trader Rating
Open Demo Account Full Review
Strengths
  • Market-leading social trading platform
  • Wide range of cryptocurrencies
  • Authorised and regulated by several leading financial authorities
  • Beginner-friendly features such as CopyTrader
  • Wide selection of Stocks-CFDs
Weaknesses
  • High Forex spreads - not great for FX traders
  • Only supports one base account currency (USD)
  • $5 withdrawal fee
  • Offer does not apply to US users
$200 Min Deposit
Low Trading Fees
Good App Support
1:5 Max Leverage
67% of retail CFD accounts lose money
2nd

Tickmill

Trader Rating
Open Demo Account Full Review
Strengths
  • Regulated by the FCA
  • More than 200 million trades
  • Nice range of assets
Weaknesses
  • No ability to choose a trading platform
  • No 24/7 customer support
£100 Min Deposit
Mid Trading Fees
Good App Support
1:5 Max Leverage
Note: 76.4% of Forex retail accounts lose money
3rd

Admiral Markets Review

Trader Rating
Open Demo Account Full Review
Strengths
  • Impressive education and solid research
  • Impressive range of assets to trade
  • MT4/ MT5 platforms do have add ins
Weaknesses
  • No bespoke platform, MT4/ MT5 only
  • Demo account expires after 30 days
  • Trading commissions on some accounts
£100 Min Deposit
Low Trading Fees
Good App Support
1:5 Max Leverage
Note: 76.4% of Forex retail accounts lose money
4th

Fineco

Trader Rating
Open Account Full Review
Strengths
  • Fully regulated
  • Competitive fees
  • Wide range of instruments
  • Excellent trading platform
  • No minimum deposit
Weaknesses
  • No MetaTrader platforms
  • No cryptocurrencies
  • Only bank transfers to fund the account
£1 Min Deposit
Low Trading Fees
Good App Support
1:30 Max Leverage
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69.14% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
5th

Swissquote

Trader Rating
Open Demo Account Full Review
Strengths
  • Excellent robo advisory service on offer
  • Well-regulated broker with stringent customer trust and safety practices
  • No inactivity fees on accounts
  • Excellent brand reputation
Weaknesses
  • Not the most competitive spreads out there
  • Social trading features could be better
  • Limited withdrawal and deposit options
$1000 Min Deposit
High Trading Fees
Good App Support
1:50 Max Leverage
Note: 76.4% of Forex retail accounts lose money

What is an online stock broker?

A web-based stock broker, also known as a direct-access broker, provides traders with access to the stock market for buying and selling shares in businesses around the world. They execute buy and sell orders on your behalf through an online trading platform and provide you with the tools necessary to make your own investment decisions.

With the rise of the internet, the role of a traditional stockbroker has largely been replaced by computers. These online stock brokers allow traders to buy and sell stocks with the click of a button, meaning everyday investors are unlikely to interact with a human.

While online stock brokers don’t provide any investment advice and leave the technical analysis and trading up to you, Robo advisors are a bit different. A robo advisor is an online platform that effectively replaces the role of a traditional financial advisor. Using AI and sophisticated algorithms, robo advisors allow you to put your investment decisions on autopilot as they will automatically manage your investment portfolio.

Are online stock brokers safe?

Yes, it is safe to trade stocks with an online broker. Brokers go to great lengths to ensure they are providing a safe and secure trading environment for their clients. This includes adhering to stringent procedures put in place by regulatory bodies including ‘Know Your Customer' (KYC) and Anti-Money Laundering (AML).

In addition, brokers are required by law to protect your money. Client money is kept in a secure, segregated fund away from the broker's own money, meaning it is never at risk in the unlikely event of the broker going out of business.

In the UK, traders are provided with an extra layer of protection by The Financial Services Compensation Scheme (FSCS), which protects deposits of up to £85,000 in the event of the broker's insolvency. Some of the most trustworthy brokers operating in the UK that are regulated by the FCA include:

Contentgrafiken Vergleich Aktien

Can I buy stocks online without a broker?

There’s no unwritten rule that says you have to use an online broker in order to buy stocks. There are plenty of traders, keen to avoid trading commissions, that choose to buy stocks though direct investments and mutual funds.

However, this involves a lot more groundwork on your end. Many large companies allow you to avoid online brokers by buying directly from them. Often connected with dividend reinvestment plans (DRIPs), this involves researching which companies allow you to buy stocks directly and contacting them yourself.

For many traders, the benefits of using an online stock broker far outweigh the almost negligible savings you’d make by avoiding them.

Online stock broker advantages

Affordability

Online stock brokers have made buying and selling stocks affordable for every trader – regardless of the size of their account balance. Dealing costs have decreased considerably over the years as brokers compete for business, while it is no longer necessary to pay an expensive middleman or full-service broker to make investment decisions on your behalf.

Flexibility

When it comes to stock trading, time is of the essence. Economic events and news can cause markets to nosedive or rally at a moments notice. Online stock brokers allow you to execute trades immediately through their trading platforms, with some helping you stay ahead of the curve by providing built-in features such as economic calendars and live news feeds.

Opportunity

Online brokers allow you to invest and choose the best shares in businesses around the world drawn from every imaginable sector. Thousands of shares are available at your fingertips that you can buy with a simple click of a button. Online brokers do the heavy lifting so that you don’t have to by providing historical price charts and even market sentiment towards a particular stock. Without an online trading platform, traders would have to spend hours manually researching and selecting stocks.

c

How do online stock brokers make money?

In exchange for providing you with access to the global stock market and executing your orders, some online stock brokers charge a commission per trade while others will charge a spread.

The ‘spread', or difference between the buying and selling price of a stock, is the most common and popular way of making money for brokers. On top of the spread, some brokers charge a commission on each transaction, although this is typically reserved for (Electronic Communication Network) and STP (Straight Through Processing) trading accounts.

Many brokers that claim to offer ‘commission-free trading' typically end up making their commission by widening the spread on trades. Learn more about how brokers make money in our guide to brokerages fees.

Choosing the right online stock broker

With a dizzying number of online brokers competing for your business, how do you begin to tell them apart? Here are a few pointers:

Regulation

For many traders, regulation and security are often the first thing they’ll look at. It's important to find a trusted online stock broker that is fully regulated by one or more of the leading regulatory bodies around the world. Regulators play a critical role in protecting your interests and maintaining an important system of checks and balances. All of the best stock trading platforms will be regulated by at least one of these authorities, including:

  • FCA, PRA (United Kingdom)
  • NFA, CFTC (United States)
  • ASIC (Australia)
  • CySEC (Cyprus)
  • DFSA (Dubai)
  • FSCA (South Africa)

Payment methods

Many of the best online stock brokers offer a number of ways to fund your account including bank transfers and e-wallets such as PayPal, Neteller and Skrill. A wide variety of payment methods means more ways to deposit and withdraw money, so it’s worth looking for a broker that supports your preferred payment method.

Withdrawal times

As a trader, there’s nothing worse than waiting to get your hands on those hard-earned profits Unfortunately, withdrawal times vary from broker to broker; while some brokers offer instant payment processing, others will take anywhere between 1 and 3 business days to process your request. A good broker shouldn’t make you wait longer than necessary, so we recommend choosing one with quick processing times.

Minimum Deposits

The amount you’ll need to deposit into your account varies across brokers. While some have account minimums of £200, others allow you to get started with as little as £10. The important thing to bear in mind here is how comfortable you are with the required minimum deposits.

Contentgrafiken Vergleich Aktien

For example, if you’re new to trading then it may be worth opting for a broker with lower account minimums, or at least testing out the demo accounts of those brokers with higher deposit requirements before you commit to one.

Trading Fees

As we already know, most brokers make their money off the bid-ask spread and commission fees. However, it's always a good idea to take a look at other trading-related fees including currency conversion, withdrawal and overnight funding fees.

Non-Trading Fees

It’s not unusual for traders to get stung by various non-trading related fees such as account maintenance and inactivity fees. These fees are often buried deep in a broker’s terms and conditions and can lead to unexpected charges that can quickly add up. We recommend saving yourself stress further down the line by choosing a broker that is transparent about their fees.

Trading platforms

Not every broker is equal when it comes to what trading platforms they offer. While many traders prefer to use third-party platforms such as MetaTrader over a broker’s own in-house platform, not every broker licenses MT4 or MT5 (or both) for their clients. So, if MetaTrader support is a potential dealbreaker for you, it’s worth checking to see if your preferred broker offers it.

Another thing to consider is your own ability level and what you need from a trading platform. Are you an experienced trader that needs an arsenal of technical analysis tools and add-ons such as economic calendars? Or are you a beginner looking for a platform to learn the ropes.

Some key questions to be asking yourself include:

  • Does it offer technical analysis and charting tools?
  • How easy is it to use?
  • Is there a mobile app available for trading on-the-go?
  • What useful features are available? (news feeds, economic calendars)
  • Do they offer a demo account with no expiry date?

The best stock trading platform is the one that optimally fits your needs. Whereas some trading platforms are more basic than others and clearly geared more towards beginners, others are best suited for more experienced traders.

Customer support

For some traders, the customer service offered by a broker is an important part of their decision making process. If they have any questions, they want to feel assured that their broker can help them solve their problems.

While some brokers prioritise customer service and aftersales support, others are less engaged once you’ve opened an account with them. The question is: does this matter to you?

At a minimum, support should be available 24/5 and there should also be a variety of ways to get in touch with the customer service team. If English isn't your native or preferred language, any top online stock broker will offer support in a number of languages.

Educational Resources

An often overlooked benefit when comparing brokers, especially for beginners, is the library of educational content that a broker provides. Many of the best stock trading sites provide their customers with a wealth of educational resources, from how to use their trading platform to how to make your first trade and more. If you’re just getting started and wondering how to trade stocks, you’ll find basic and more advanced trading techniques to help improve your chances of success.

Contentgrafiken Vergleich Spread Betting

Which stocks should I buy?

Some of the best stocks for beginners include ‘blue chip’ stocks that offer a solid floor and long-term growth potential. Tech stocks such as Apple, Amazon, Facebook and Netflix are some of the most popular stocks with a history of strong performance. If you’re looking for stocks that pay out to investors, there are also plenty of dividend-paying stocks to choose from.

Alternatively, if you are searching for stocks to diversify your portfolio, then it's worth taking a look at buying stocks in up-and-coming ethical businesses. Increasing numbers of investors are buying stocks in ethical businesses as environmental concerns continue to garner political and media attention.

FAQs

If you’re a beginner, the best stock broker is one that has low trading fees, a user-friendly platform, transparent pricing and a wealth of educational resources. The easiest way to find a broker that meets these requirements is by using our broker comparison tool.

With most brokers offering zero commission and no deposit fees, it’s important to take a look at the spreads available with each broker as well as the non-trading related fees. Non-trading fees, in particular, can quickly add up if you don’t pay attention to the small print. Pepperstone is a great broker that has competitive spread prices and no inactivity of withdrawal fees, making it one of the cheapest brokers on the market.

Brokers must adhere to ESMA regulations which dictate the maximum margin (or leverage) they can offer to clients. The margin available varies according to the instrument you want to trade, but is restricted to:

  • 5:1 leverage on equities & bonds (20% margin)
  • 10:1 leverage on commodities (10% margin)
  • 20:1 leverage on major indices & gold (5% margin)
  • 30:1 leverage on major currency pairs (3.33% margin)

If you need more leverage, many brokers off professional accounts with higher margin levels. However, these accounts have a strict vetting process and you must meet certain requirements in order to open one.

Here’s how you trade your first stock:

  1. Compare stock brokers
  2. Find a broker that allows you to trade CFDs
  3. Open your account and make an initial deposit
  4. Search for a stock to trade by name or ticker symbol
  5. Click ‘buy’ and enter the number of stocks you want to buy
  6. Confirm your order with the broker