Throughout history, financial assets like stocks, bonds, commodities, and currencies have witnessed alternating cycles of rising and falling prices. These fluctuations represent market opportunities for traders and investors looking to grow their hard-earned money. One critical step in making the most of the financial markets is finding an online broker that best fits your personality and financial goals.
Nowadays, all major online brokers offer $0 trading on stocks and ETFs, and many offer $0 commissions on other asset classes as well. The best trading platforms offer low fees in a way that is transparent, with limited gamification tactics that promote overtrading. They also provide ample fundamental and technical research, a wide range of investment options, state of the art trading tools, excellent customer service, strong mobile capabilities, and an abundance of easily accessible educational materials, all across powerful desktop and mobile platforms.
Best Online Brokerage Accounts and Trading Platforms of 2022
- Best Overall: Fidelity Investments
- Best Broker for ETFs: Fidelity Investments
- Best Broker for Low Costs: Fidelity Investments
- Best Broker for Beginners: TD Ameritrade
- Best Broker for Mobile: TD Ameritrade
- Best Broker for Advanced Traders: Interactive Brokers
- Best Broker for International Trading: Interactive Brokers
- Best Broker for Options: tastyworks
Fidelity Investments: Best Overall, Best Broker for ETFs, and Best Broker for Low Costs
- Account Minimum: $0
- Fees: $0 for stock/ETF trades, $0 plus $0.65/contract for options trade
Get $100 when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply. Offer Disclosure.
Why We Chose It
Fidelity continues its multi-year reign as our top pick for the best broker overall and the Best Broker for Low Costs. For the first time, the company has also been awarded the top slot in our Best Broker for ETFs category, beating out Charles Schwab. Fidelity brings the full-service experience to both its institutional and retail clients with sophisticated tools presented through a simple workflow, all at a low price.
Committed to eliminating common account fees
Strong portfolio analysis and account features
Excellent order execution
Powerful Active Trader Pro platform
Fractional shares trading in over 7000 U.S. stocks and ETFs
Higher broker-assisted trade fees
Minimum balance for some index trading
No access for non-U.S. citizens
Multiple platforms may be required to access all tools
Fidelity is our top pick overall, as well as our top choice for best low-cost broker and best broker for ETFs due to its continued product enhancements, strong customer support, unmatched value, and deep research and educational resources. Fidelity’s storied history began with its founding in 1946. With $4.3 trillion in discretionary assets as of March 2022, the Boston-based company ranks among the top brokerage firms in terms of assets under management.
Always striving to improve its products and services, Fidelity recently made news by launching a Digital Assets Account (DAA) which will enable plan sponsors to offer their participants access to Bitcoin through an investment option in their plan’s core lineup. In addition, the company introduced the Fidelity Crypto Industry and Digital Payments ETF (FDIG), along with a Fidelity Metaverse ETF (FMET). Enhancements also came to the institutional side of the business, with the company expanding access to some of its proprietary tools like Fidelity Bond Beacon.
For investors looking for individual help, Fidelity has added to its lineup with digital direct indexing accounts called Fidelity Managed FidFolios. The FidFolios use fractional shares to mimic indexes with ownership of the actual stock rather than an ETF, allowing for deeper customization. But the improvements don’t stop there, as Fidelity also upgraded its mobile experience with a redesigned app dashboard that includes streaming quotes on the home screen and further news feed customizations.
After years of very tight competition, Fidelity surpassed Charles Schwab as our best broker for ETFs this year. Like Schwab, Fidelity offers rich ETF-focused educational content, powerful ETF screening tools, and a deep pool of ETFs to choose from. But it was Fidelity’s fractional share trading in ETFs that helped push it over the top.
Fidelity has been an industry leader when it comes to lowering fees, and it has a stellar reputation as a broker with a huge customer service network supporting its low-cost, high-value offering. Investors looking for an online broker that keeps costs low while delivering value will be hard-pressed to find a better broker than Fidelity.
TD Ameritrade: Best Broker for Beginners and Best Broker for Mobile
- Account Minimum: $0
- Fees: Free stock, ETF, and per-leg options trading commissions. $0.65 per options contract.
Why We Chose It
TD Ameritrade maintains its position as the Best Broker for Beginners and the Best Broker for Mobile because of its intuitive platform, comprehensive educational offering, and outstanding mobile options analytics, research amenities, and trading tools.
Wide range of product offerings
Superb educational content
Top-notch trading technology and options analytics across platforms
Very capable paper trading platform
Strong customer support
Some account fees are relatively high
Does not offer fractional shares
Must opt in for automatic cash sweep
Cryptocurrency trading through OTC trusts, ETFs, mutual funds, and Bitcoin futures only
We chose TD Ameritrade to repeat as the winner of our best broker for beginners and best broker for mobile categories because of its ongoing commitment to provide investors with easy access to some of the industry's best educational content, mobile trading tools, and research amenities.
Founded in 1975 and purchased by Charles Schwab in 2019, TD Ameritrade is a top full service online broker. True to form, the company continues to roll out new product enhancements, like updates to its already impressive charting functionality and a portfolio digest feature announced in 2022.
TD Ameritrade’s highly regarded thinkorswim® trading platform is powerful yet intuitive. Developing personal trading strategies is made easier with access to robust backtest tools, while the implementation of these strategies can be practiced using the platform's very capable paper trading function. When it comes to functionality, accessibility, and flow across the mobile, desktop, and web platforms, TD Ameritrade offers an experience that is as consistent as it gets.
Recent enhancements to E*TRADE’s mobile platform brought it closer in the running for best broker for mobile this year, while Interactive Brokers boasts the most sophisticated mobile platform available.That being said, TD Ameritrade simply offers the best mobile package overall. This overall strength is due to the widest offerings of asset classes available, access to highly regarded customer service, premium research, powerful screening features, calculators with backtesting capabilities, and tools to assess your overall financial situation—all with no balance requirements and low, transparent pricing,
Interactive Brokers: Best Broker for Advanced Traders and Best Broker for International Trading
- Account Minimum: $0
- Fees: Maximum $0.005 per share for Pro platform or 1% of trade value, $0 for IBKR Lite
Why We Chose It
With the closest competition still well behind it in these two categories, Interactive Brokers (IBKR) repeats as our top broker for both advanced day traders and for international traders due to its breadth of global assets and advanced analytical tools and calculators.
Superior order execution
Contingent orders for every conceivable situation
Unparalleled range of investable foriegn and domestic assets
Low margin interest rates
Trader Workstation (TWS) is very powerful and highly customizable
IBKR's SmartRouting not available to IBKR Lite clients
TWS can be difficult to learn
No backtesting of custom trading algorithms or automated trading
Interactive Brokers’ modest fee-based pricing is tiered and can be a bit confusing
Interactive Brokers is our top choice for both sophisticated and international traders because there simply isn’t another broker that combines such a wide variety of investable global assets, sophisticated trading technology, and rich research capabilities. With 1.92 million client accounts and $2.17 million in daily trade values, IBKR is a stable, well-capitalized broker that is also publicly traded.
The company was founded in 1978 by its current Chairman, Thomas Peterffy, under the name T.P. & Co. The company pioneered the use of computers in trading, but it wasn’t until 1993 that Interactive Brokers Inc. was incorporated as a US broker-dealer. Now it is one of the most complete brokers in the industry. With access to 150 markets, trading in stocks, options, futures, currencies, bonds, funds, crypto, and more supported in 200 countries, and funding methods available in 24 currencies, IBKR is the best international broker, hands down.
To maintain a large gap over the competition, the company is constantly innovating. More notable enhancements of late include a market rate interest paid on uninvested cash, the IBKR GlobalTrader mobile app, and the addition of fractional shares trading for European shares and ETFs.
International traders can access financial markets and all assets on the desktop, web, and mobile versions including both the IBKR Mobile and the IBKR GlobalTrader app. TWS is a superbly designed platform that brings technical analysis, social sentiment, fundamental research, and financial calculators together in a way that equips users to capitalize on price inefficiencies better than any other platform we reviewed.
tastyworks: Best Broker for Options
- Account Minimum: $0
- Fees: $0 stock trades, $1 to open options trades (capped at $10 per leg), $0 to close
Why We Chose It
We chose tastyworks as the best options trading platform because of the way it optimizes tools and content to suit the needs of its options-focused client base. Moreover, tastyworks has set up its options pricing with caps that make it the lowest cost brokerage for high volume, high frequency option traders.
Capped commission structure for options
Highly regarded tools for analyzing and monitoring options trades
Superb options-specific content and educational material
Recent dashboard improvements make for an even better trading experience
Follow Feed feature allows users to follow trades of tastyworks’ TV celebrities
Limited investment options
Few investing and retirement resources
Weak portfolio analytics
No news or fundamental analysis
Tastyworks maintains its stance as the best broker for options because of its intuitive delivery of an industry-best mix of options-focused tools and content. Launched by tastytrade in 2017, tastyworks was created by the same people that created and developed TD Ameritrade’s highly regarded thinkorswim® application.
Tastyworks delivers very competitive fees for options trading, with standout features like commission caps for large lot sizes, as well as the absence of any commissions when closing positions. Fortunately for tastyworks users, these low commissions do not come with a platform that delivers poor options analytics, inefficient platform workflow, or slow trade execution. In fact, the tastyworks platform brings all of these elements together in a manner that is among the best of all the companies we reviewed.
Tastyworks has acted on customer demand for social trading capabilities by allowing users to follow individual traders in real time and enabling them to both view and replicate strategies employed by other traders. Although tastyworks still provides top-notch customer service, a capped fee structure on options trades, and superb options-related educational and trading content, our updated methodology punishes them for the lack of key research features and limited mobile charting capabilities. A company representative did inform us that they are working on these issues, but any enhancements come too late to keep tastyworks from giving up its hold on our best broker for advanced options traders and best broker for mobile options traders to Interactive Brokers and TD Ameritrade, respectively.
As the Federal Reserve’s focus has switched from promoting growth in a post-COVID world to fighting the devastating effects of elevated inflation, 2022 has taught a new generation of traders that markets can actually undergo cycles of high volatility. While all online brokers make money on the trading activity of their client base, either directly or indirectly, the best brokerage platforms provide strong customer support, robust research and analytical tools, expansive education content, a wide variety of available assets, and an abundance of account types, all with a transparent fee structure and limited gamification tactics.
Based on our exhaustive review of the top online brokers, we determined that Fidelity not only outshines the competition when it comes to ETF investing and low costs, but is simply the best brokerage overall. Beginners and experienced investors alike will find TD Ameritrade’s trading platform and breadth of resources to be advanced while remaining intuitive, along with a mobile experience that is best-in-class. Tastyworks’ platform is also intuitive enough for newcomers and the educational and market content is hard to beat, but only if you plan to make options trading your focus. Finally, when you’re ready to bring your trading to the most advanced platform available with access to the most international markets by far, the experience offered by Interactive Brokers is unmatched.
What Are Options?
An options contract gives the holder the right—but not the obligation—to buy or sell the underlying asset at a set price on or before a certain date. There are two primary types of options: A call option gives you the right to buy a stock, while a put option gives you the right to sell a stock. The strike price (aka exercise price) is the price at which you buy or sell the stock should you opt to exercise the option. The expiration date is when the options contract expires and becomes worthless. Because options derive their value from underlying assets, they belong to the group of securities known as derivatives.
How Do You Start Trading Options?
Investors use options to hedge risk or to speculate. To get started, you will need a brokerage account that's approved for options trading. If you already have a brokerage account with a broker that supports options, you can fill out an application to enable options. After you provide details about your investment objectives, trading experience, and financial situation (e.g., annual income, employment info, net worth, and total net worth), the broker will review your application and either approve or deny it. If you are approved, the broker will let you know which options level you're approved to trade. If your current broker doesn't support options (or you want to try a different broker), you can apply for options trading after your standard brokerage account is approved. Depending on your broker and options strategy, you may also need approval for margin privileges.
Once you are approved for options trading, the next step is to decide which options you want to trade. The type of options contract you trade depends on the direction you expect the underlying stock to move:
- If you expect the stock price to rise: buy a call option, sell a put option
- If you expect the stock price to fall: buy a put option, sell a call option
- If you expect the stock price to remain stable: sell a call option or sell a put option
After that, you need to pick the option strike price. Options quotes (aka an "option chain" or "matrix") list the available strike prices, which are based on the underlying stock's price. The strike price you pick reflects where you think the stock's price will move during the option's lifetime. You also have to choose an option time frame: the expiration date after which the option will expire and become worthless. Expiration dates range from days to months to years. In general, the shorter the time frame, the riskier the option.
How Much Money Do You Need to Trade Options?
That depends on your broker and the type of options strategies you employ. In general, the minimum required deposit is less than $1,000 for level 1 (entry-level) options trading or as much as $10,000 for level 2 or level 3 options trading. Even if the required minimum is low, it's always a good idea to have at least $5,000 to $10,000 to start trading options.
What Should You Consider When Choosing an Options Trading Platform?
While costs are one consideration when choosing an options broker and trading platform, there are other factors to weigh. If you are a new trader, it will be helpful to have a broker that offers substantial educational offerings—such as articles, videos, and webinars. Intermediate and advanced traders will want a robust trading platform and a full suite of options-specific trading tools and resources.
The commission structure for options trades tends to be more complicated than for stock trades. Until the commission cuts that swept the industry in the fall of 2019, most brokers charged a fee for each leg of an options spread plus a per-contract commission. The per-leg fees, which made 2- and 4-legged spreads expensive, have for the most part been eliminated industry-wide. We are also seeing some brokers place caps on commissions charged for certain trading scenarios.
Investors with fairly large portfolios can also take advantage of portfolio margining at some brokers. This is a practice that assesses the total risk inherent in a portfolio that contains stocks and derivatives. Investors with large portfolios can use portfolio margining to reduce the size of the margin loan.
What Kind of Options Trader Are You?
The first and most important piece of information to consider before selecting an options trading account is what kind of trader you are. What is your trading style and risk appetite? Which tools would you like to have handy?
If you're just getting started with options trading, the quality of education and help offered by your broker is important. Frequent traders and those who trade a large number of contracts will be more sensitive to commissions and fees, so check out your prospective broker's charges and make sure you understand them.
How to Pick a Broker That's Right for You
Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. This year, we revamped the review process by conducting an extensive survey of customers that are actively looking to start trading and investing with an online broker. We then combined this invaluable information with our subject matter expertise to develop the framework for a quantitative ratings model that is at the core of how we compiled our list of the best online broker and trading platform companies.
This model weighs key factors like trading technology, range of offerings, mobile app usability, research amenities, educational content, portfolio analysis features, customer support, costs, account amenities, and overall trading experience according to their importance. Our team of researchers gathered 2425 data points and weighted 66 criteria based on data collected during extensive research for each of the 25 companies we reviewed.
Many of the brokers we reviewed also gave us live demonstrations of their platforms and services, either at their New York City offices or via video conferencing methods. Live brokerage accounts were also obtained for most of the platforms we reviewed, which our team of expert writers and editors used to perform hands-on testing in order to lend their qualitative point of view.
Read our full Methodology for reviewing online brokers.