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2021 Rankings

Best Online Stock Trading Sites

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Are you looking for a new way to invest? Online Stock Trading Sites are an easy and convenient way to buy stocks. You can trade from the comfort of your own home, at any time of day or night. Try one now for free!

Frequently Asked Questions on Online Stock Trading Sites

What are stocks?

Stocks refer to the ownership shares of a company, and buying stocks makes you a part-owner of that specific company. As the company grows, you get to earn a portion of their profits for being a part-owner. However, if the company does not perform beyond market expectations, you’ll also experience losses along with them.

Are online stock trading sites safe?

With safety measures and regulations in place, these online brokerages are safe. However, this does not mean that there are no threats at all. As a careful trader, it pays to set up your own precautionary measure to keep yourself safe. Comparing online stock trading sites will give you an idea of which one would give you the security that you need. 

What are the security measures used in online stock trading sites?

Two-factor AuthenticationOther than the password, additional features could be opted for by the investor to increase account security. Security questions could be asked upon logging in. Another is to receive a unique one-time password (OTP) through text or email. Encryption and CookiesIt would be good to check if an online stock trading site makes use of encryption and cookies to protect account information. You could check in the URL if cookies are sent only through a secured hypertext transfer protocol (HTTPS).No Information Selling to Third PartiesAny online trading site should never sell customer information to third parties such as advertisers and marketers. Not only is this a violation of the right to data privacy, but it is also an exposure to fraudsters and hackers. 

What are the requirements for opening an online trading account?

Online trading sites would usually require documents to prove that you are a legitimate person. There are also additional measures to prevent identity theft and fraudulent activities. a. Filled-up Form of Required Informationb. Government-issued IDs and Taxpayer Identification Numbers (TIN)c. Proof of Billing Statementsd. Video Call Confirmatione. Email Confirmationf. Initial Deposit

How will stocks affect my tax bill? 

This will largely depend on national or federal regulations. Most countries charge different taxes for capital gains, long-term holdings, short-term holdings, and interest rates. It would be best to contact an accountant or a tax practitioner before you make any big investment decision. 

What are the types of stock orders that I could make?

a. Market Order As the simplest and most common stock trade, the market order is carried out by placing an order to buy and sell stocks at the current market price.b. Limit Order The limit order takes place when you place an order to make a trade when it meets your maximum buying price or minimum selling price. Do take note that this order may never be executed when your criterion is not met.c. All-or-None OrderStocks may not be available right away, and what happens is that you pay different prices for different portions of the order. An all-or-none order requires a trade fulfilled when there are sufficient stocks. Otherwise, the trade is simply not done. d. Fill-or-Kill OrderAs a strict type of order, the fill-or-kill order requires that a transaction meets the criterion and is wholly executed immediately, or else the whole order is canceled. e. Immediate-or-Cancel Order It is a close cousin of fill-or-kill. The difference lies in the fact that immediate-or-cancel order allows partial execution as long as the criterion is met. When succeeding portions fail, the remaining order is cut and canceled.f. Stop OrderOnce the stop price is met, the stop order is converted to a market order. This means that a transaction is executed at the current market price. g. Stop-Limit OrderAlmost like the former, a stop-limit order is converted to a limit order once the stop price is met. Thus, the trade is carried out when it meets the minimum selling price or the maximum buying price.h. Short Sell OrderSelling short a stock is done when you think the stock price will fall. A certain stock may be temporarily inflated, so you borrow a number of such stocks and sell it at the inflated price. When the price falls, you do the next type of trade—buy to cover order—to complete the short sale. i. Buy to Cover OrderThis is done in tandem with the previous type of order. When the price does fall, you now have to return the borrowed shares and purchase them. The money left over from selling them at the inflated price is your profit. j. Day Order and Week OrderThis type of order pertains to when a trade can be executed. A trade is a day order when it is only good until the end of the regular day. If not executed by then, it is canceled. Similarly, the week order is executable for a week. k. Good-Til-Canceled OrderThis is another order type that pertains to when a trade takes place. A good-til-canceled order remains executable unless it is done or it is canceled. The risk of this is that you might forget about it. Plus, you pay more trade fees if it is partially done on different days rather than when it is completed in a single day. l. Trailing Stop OrderThis is similar to the stop order, except that the stop price is expressed as a spread of different points or a percentage of the current market price. m. Bracketed OrderA bracketed order is just like the trailing stop order but it goes further by setting an upper limit as well. When the upper limit is met, the stock is sold. 

What are the learning resources offered by online stock trading sites?

Trading Basics and Advanced ModulesOnline trading sites could make educational offerings that are made up of basic manuals, videos, podcasts, forums, and blog posts. These materials could talk about how to start an account, fundamental analysis, portfolio diversification, and how to interpret charts. It would give all the things needed to know before you start with trading. Comprehensive GlossariesA comprehensive glossary lists investment jargon that is practically used when trading. It sheds light on what these terms mean and how these terms are relevant in trading strategies. This is great because some terms are jarringly unfamiliar and intimidating if you don't have much background in finance and investment. Comprehensive ResearchThere are two types of research and analysis that are important in trading. These are fundamental research and technical research. Each has its focal points, but it would be more effective and prudent to consider both in making investment decisions. Online stock trading sites provide these in-house research materials that are accomplished by credible finance and market experts. Fundamental ResearchCorporate financial statements are the starting point of every fundamental research and analysis. It sheds light on the intrinsic and fair market value of a particular stock. By making use of ratio, it will give you a glimpse of the financial position and performance of a stock corporation. This is important for long-term investors and traders. Technical ResearchTechnical research and analysis take on a different approach. It analyzes the value of a stock based on charts, patterns, trends, and predictions. Data could change on a daily basis, and frequent analysis of such data would suit the preference of short-term investors and traders. 

What are profitability, liquidity and solvency, and valuation ratios?

Profitability RatioYou may get a glimpse of how profitable the operations of a firm are. A positive rate is a green signal that lets you know the company is thriving well and can give promising returns to your investment. Liquidity and Solvency RatioAs most investments are made with the long term in mind, these types of ratios are worth a second look. The liquidity ratio shows how a firm can keep up with current obligations. You may see it in how current assets are greater than current debts. The solvency ratio gives you an idea if the firm could be up and running for years to come. Debt has to be relatively lower than equity. Valuation RatioYou will likely want to know if you are investing in stocks that are worth your money. Look your way into various types of valuation ratios as they can tell you the value you paid in exchange for future profit, cash flow, and sales. They will also indicate overall the expectations of a company's future situation. 

What are the fees that I have to note when trading?

Initial or Minimum DepositMany online trading sites would require you to deposit an initial amount of sum before you could open a trading account. The amounts differ per online brokerage. It may also depend on the type of accounts you are making. Stock Trade FeesTypically, the bulk of trading comes from the stock exchange. Thus, it is important to know what is per contract fee is for online stock trading sites. Especially for short-term traders, a relatively lower stock trade fee is highly desirable as exchanges are more often made. Option, Bonds, Futures, and Other Securities Trade FeesOnline stock trading sites also offer other types of investment securities. A prudent trader and investor would more often seek more diversification in their investment portfolio. Depending on the type of investments you are planning to make, it would be great to factor in these rates as well. Commission-Free ETFsThe majority of online stock brokerages offer commission-free exchange-traded funds (ETFs). This means that you can make a trade without any transaction fees. This is particularly great because this would save you lots of bucks from buying and selling stocks.

Isn’t stock trading risky?

Of course, stock trading has its risks. However, risk will always be present whenever you’re investing. That’s why it’s crucial that you are aware of how you should manage and strategize your trades to reduce your chances of having losses. It’s also why most stock trading sites offer consultation services to their traders. 

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