Investing in a stock market involves trading of stocks. Stock trading refers to the buying and selling of stocks in the financial market. When an investor buys a certain number of shares of stocks of a particular business or company, this investor becomes a shareholder — who is a part-owner — of that same company. As a shareholder, any profit that the company will gain will be shared with him in the form of a dividend. Likewise, if the company fails and incur losses, the shareholder will also share the burden and suffer the company’s loss as well.
Stock trading usually happens on the exchange floor of the stock market, where people are usually seen waving, yelling, and gesturing at one another while they buy and sell stocks. The investor will have to approach a stock broker, who will make certain arrangements for his orders. The stock broker will then contact the floor clerk, who will look for a floor trader from whom the orders may be bought.
But there is another way of trading stocks, and this is through online trading and buying stocks online. Obviously, online trading is a process of trading stocks electronically, thus, this is more simple, much easier, and even more convenient and faster for the investors. With online trading, a stock broker may still be required, as the broker will be the one to connect with the exchange network and look for buyers and sellers of the stocks being ordered.
Most Popular Online Brokers
There is a variety of online brokers available today, and as investors, it is wise to choose the one that would best suit our the service requirements and budget for charges and fees. It is best to make some research on the most popular online brokers list and compare their rates and services. We will discuss some of the best and cheapest online brokers that are most well-known among the online investors nowadays.
- The best stock broker we’ve found is OptionsHouse. They have NO hidden fees, NO trading activity requirements, and NO minimum balances! OptionsHouse is one of the cheapest brokers with a flat free trades rate of $3.95, with two flexible rates for options trading. Their Research Center gives you the insights you need to make smart investment decisions, which is great when dealing with stocks online. They have on-site customer service with a team of experienced professionals ready to help you with any question or trading emergency – we even tested their support and it was great!
- TradeKing is another cheap online brokers available today (not as low as OptionsHouse!). It charges $4.95 flat-fee rate per stock trade. There is no additional fee for broker assisted or call in trades, and there is no inactivity or maintenance fees as well. TradeKing offers one of the cheapest non-tiered commission structure, and they offers investments on basic stocks and options, and mutual funds and ETFs. They have the ability to buy fixed income investments like CDs, bonds, and US treasury issues.
- Zecco is another cheap online broker, which charges $4.95 per trade for stock trades. Options require additional $0.65 per contract. There is no minimum required amount to open a Zecco account. Moreover, Zecco offers 10 free trades if an investor makes at least 25 trades during the month. It offers various types of investments such as stocks, options, Forex, and bonds.
- ETRADE charges $12.99 for both market and limit orders, including penny stock trading for $1 or less. An investor needs at least $1,000 to open an ETRADE account. There is a $40 quarterly fee for using their services. This may be considered as a cheap online broker for the active traders who do not need so much hand-holding.
Finding the cheapest online broker is critical to saving your money through wasteful and unnecessary fees and charges some online brokers like to charge their clients. Signup with the recommended online broker company above to get you started on the best path today.