In investing, there are all types of “beginners.”
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In the most straightforward sense, beginners are individuals with limited or no investing experience. However, if you’re an infrequent trader or small investor, you might be a beginner in the sense that you don’t need or want the features that often come with advanced trading platforms made for experienced market participants.
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Our list of the best trading platforms for beginners focuses on selections suitable for both groups.
Methodology
To determine the best trading platforms for beginners, our team of experts started by evaluating 24 brokerage firms and investment platforms — from large, legacy brokerages to relatively new financial technology (fintech) companies. We then scored each according to nine main factors focused on investment selection, access to robo-advisory services and trading costs. We also subjectively considered educational resources for beginners and the quality and appropriateness of the trading platform itself.
In general, our methodology focused on factors that offer beginning traders and investors lots of choices on how they want to get started. Therefore, some trading platforms with lots of bells and whistles, like Interactive Brokers, ranked higher than more straightforward platforms geared toward beginners, such as Robinhood. Beginners who only want to buy and sell stocks, and maybe place an options trade now and again, should check out our review of the best investment apps, which include mostly fintech firms that offer easy-to-use interfaces. But if you’re a beginner who wants to learn alongside and grow into a more in-depth trading platform, this list includes many full-service brokerage platforms that offer features for both new and experienced users.
See below for a look at our complete methodology and how we determined the best trading platforms for beginners.
Show summary
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Fidelity Investments
: Best trading platform for beginners overall
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Merrill Edge
: Best for existing Bank of America customers
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SoFi
: Best for a one-stop shop for all of your money needs
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Webull
: Best for beginning options traders seeking relatively low margin interest rates
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Charles Schwab
: Best for new traders seeking a legacy brokerage
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Interactive Brokers
: Best for beginners who want to trade in a professional environment
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Firstrade
: Best for do-it-yourself options traders
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E*TRADE
: Best for long-term investors who trade occasionally
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Public
: Best for frequent but basic-level option traders
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Robinhood
: Best for cryptocurrency traders
Fidelity Investments
Best trading platform for beginners overall
Tradable asset classes
Seven
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Automated investing option
Yes
5/5
Why we picked it
For new and inexperienced traders, Fidelity has all of the bases covered, making it the highest-rated trading platform for beginners.
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For starters, Fidelity charges zero commission on all stock, exchange-traded funds (ETFs) and options trades. Option trades do incur a $0.65 per contract fee, as is standard, particularly among large, legacy firms. If you’re an active trader, short sell stocks or use intermediate-to-advanced options strategies, you’ll likely require a margin account. Fidelity does a gof warning investod job oors about the risks of margin trading. If you decide to go there, you’ll find competitive margin interest rates at Fidelity, starting at 13.575% on balances of less than $25,000, as of June 2024.
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Fidelity also offers fractional share investing. Its “Stocks by the Slice” feature allows small investors to purchase shares of more than 7,000 domestic stocks and ETFs with as little as $1. This approach not only lets you buy high-priced stocks in small quantities, but it can let you test ride a trading platform without putting much money on the line. To that end, Fidelity’s Active Trader Pro platform is free for all users and easy for beginners to navigate and make sense of while providing many of the bells and whistles season traders demand.
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If you become a high roller, Fidelity offers elevated service levels — Active Trader Services and Active Trader VIP — that kick in at portfolio values of $250,000 and $1 million, respectively, and provide perks, such as more competitive margin rates.
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Bottom line: Fidelity is an excellent brokerage for all levels of traders and investors. If you’re a long-term investor with long-term money in the market who wants to start trading, Fidelity is a perfect place to sustain both objectives.
Pros
- Low commission and fee structure
- Solid features for beginners, including fractional shares
Cons
- Crypto trading requires a separate account but is integrated with Fidelity’s main user dashboard
- You can find more attractive margin interest rates elsewhere
Who should use it?
Long-term investors, who also want to trade more frequently, should consider Fidelity Investments for both approaches.
Merrill Edge
Best for existing Bank of America customers
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Automated investing option
Yes
4.7/5
Why we picked it
Bank of America has around 69 million consumer and small business clients, roughly 3,800 retail financial centers and approximately 15,000 ATMs. This makes it the second-largest bank in the United States.
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Bank of America acquired Merrill Lynch in 2008, eventually giving Merrill Edge clients access to the massive BofA network. In addition to in-person service across the nation, Merrill Edge account holders with balances of $20,000 or more can work with live financial advisors at many Bank of America branches.
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This synergy gives Merrill Edge’s brokerage clients access to BofA’s well-regarded market research, a key tool for all types of traders. Merrill’s Idea Builder uses BofA data to help brokerage clients find investments by searching across themes along social, environmental and health-related lines. Merrill Edge self-directed clients also have free access to the firm’s impressive MarketPro trading platform, which carries no minimums, is commission-free and contains excellent stock and options trading tools for beginning and experienced investors.
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Merrill Edge’s commission and fee structure is almost identical to Fidelity’s, however, it’s not as transparent about its margin rates and does not offer fractional share investing. Merrill Edge says that “Margin interest rates are determined by a few factors, including … your debit balance and your overall relationship with Bank of America and Merrill.” In this context, “relationship” tends to have a lot to do with how much money you keep at a firm, which, when combined with the absence of fractional shares, is one drawback of Merrill Edge’s platform.
Pros
- Convenient option for existing Bank of America customers
- Low commission and fee structure
Cons
- Fractional share investing not available
- Margin interest rates not published
Who should use it?
Existing Bank of America customers will want to seriously consider trading and investing via Merrill Edge.
SoFi
Best for a one-stop shop for all of your money needs
Tradable asset classes
Five
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Automated investing option
Yes
4.7/5
Why we picked it
SoFi targets millennials and Generation Z with a comprehensive suite of personal finance and investing services, from banking and credit to trading and investing. This makes it an ideal one-stop shop for all of your money-related needs, which might include trading equities.
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One reason why SoFi ranks so high on our list of the best trading platforms for beginners is because it’s hard to beat the company on commissions and fees. With SoFi, you’ll pay zero commission or fees on nearly all stock, ETF and options transactions, notwithstanding a $5 exercise/assignment charge and a few cents per contract to cover regulatory fees on options trades. SoFi provides few barriers to entry, making it easy to start trading with relatively little capital.
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SoFi says it charges a “standard margin rate” of 11% as of May 2024, however the interest rate you pay on a margin loan fluctuates based on your balance. As SoFi points out, “The higher the balance in a margin account, the lower the likely margin rate. So the more you borrow from the brokerage, the less you’ll pay in interest for it, as a percentage of the balance.” As with Merrill Edge, it’s tough to find specific details on SoFi’s margin interest tiers.
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SoFi’s fractional share investing feature includes more than 4,000 stocks and ETFs and requires a minimum investment of just $5. Additionally, all SoFi members, including those who would like trading and investing guidance, have free access to human financial advisors, who are held to the fiduciary standard.
Pros
- Among the lowest commission structures in the business
- Offers fractional share investing and free one-on-one financial advice
Cons
- Trading platform might better suit the needs of advanced traders
- Some of SoFi’s proprietary ETFs have relatively high expense ratios
Who should use it?
SoFi is the perfect option for beginning traders who would like to keep all of their personal finance and investing accounts at one firm.
Webull
Best for beginning options traders seeking relatively low margin interest rates
Tradable asset classes
Five
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Automated investing option
Yes
4.6/5
Why we picked it
No two names on our list of the best trading platforms for beginners are more alike than Firstrade and Webull. Like Firstrade, Webull makes the most sense for new options traders.
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Webull charges no commissions or fees to trade stocks, ETFs and equity options, although you will pay $0.55 per contract to trade index options. It also does not charge assignment or exercise fees on option trades and, as is obligatory at all brokerages, it charges a few cents per option contract to cover regulatory fees.
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Webull makes it easy to trade options with 11 strategies to choose from, an options screener, options chains you can trade directly from and a scanner that shows unusual options activity. It also offers paper trading, solid education resources and analytical tools to help you find and assess potential trades.
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On balances up to $25,000, Webull charges a relatively low 9.74% margin interest rate, which drops to 9.24% on balances up to $100,000, as of June 2024.
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With a minimum investment of $5, you can trade fractional shares on stocks and ETFs at Webull. You can access robo-advisory services at Webull with just $100 and an 0.2% annual advisory fee after six months of fee-free use.
Pros
- Low commission and fee structure
- Sub-10% margin interest rates on small balances
Cons
- No human financial advice
- Platform might be too advanced for some beginners
Who should use it?
New options traders looking for relatively low-margin interest rates should consider Webulll.
Charles Schwab
Best for new traders seeking a legacy brokerage
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0.65 per option contract
Automated investing option
Yes
4.5/5
Why we picked it
Charles Schwab got a big upgrade when it purchased and integrated TD Ameritrade’s thinkorswim trading platform into its own. Between its browser-based and mobile platforms and thinkorswim’s desktop, web and mobile interfaces, traders have seamless access to stock, ETF and advanced options trading. Via the entire thinkorswim ecosystem, you’ll utilize real-time, full-depth Level II data; paper trading features; alerts; and advanced charting. If thinkorswim is too much, you can use Schwab’s platforms exclusively to trade.
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Schwab’s commission and fee structure is standard at zero commissions for stock, ETF and option trades alongside a $0.65 per contract fee. There are no account minimums or maintenance fees across most Schwab accounts. However, if you opt for automated investing at Schwab, you need at least $5,000 for its free baseline service and $25,000 for its premium service, which charges a one-time fee of $300 and $30 a month.
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Schwab’s margin interest rates are run of the mill at 13.575% on balances below $25,000, as of June 2024.
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Schwab offers fractional shares with a $5 minimum investment, but the feature is limited to S&P 500 stocks only.
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Some investors find comfort in going with well-regarded, legacy brokerages. If you’re seeking a long track record in your broker, Schwab, alongside Fidelity, might make sense for you.
Pros
- Access to the thinkorswim trading platform
- Low commission and fee structure
Cons
- You can get lower margin rates elsewhere
- While impressive, thinkorswim might be overkill for beginners
Who should use it?
New traders who prefer a longstanding, legacy brokerage should consider Charles Schwab.
Interactive Brokers
Best for beginners who want to trade in a professional environment
Tradable asset classes
7
Commissions & fees
0-$0.005 stock & ETF commissions/$0.15-$0.65 per option contract
Automated investing option
Yes
4.4/5
Why we picked it
Interactive Brokers is well-regarded as the platform for serious day traders and financial professionals, such as hedge fund managers. While beginners cannot or do not have to use or even pay attention to IB’s advanced features, they are representative of the platform as a whole. It’s deep and sophisticated, which could mean it’s too much for beginning traders.
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That said, if you’re ready to dive in, Interactive Brokers has two main tiers, both with no minimum balance requirement: IBKR Lite and IBKR Pro. If you only trade stocks and options, you can probably stop at IBKR Lite and its commission-free stock and ETF trading. However, if you’re interested in trading other assets, such as options and futures, IBKR Pro can be the better choice.
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IB’s fixed and tiered commission structure, which varies considerably across asset classes and tiers, can make even a seasoned investor’s head hurt. To determine the plan that works best for you, you’ll need to spend some time looking at Interactive Brokers’ pricing, think about how much and how often you’ll be trading and run your own numbers. There’s no one-size-fits-all here, other than to say IBKR Lite is likely best for novice traders, and the tiered pricing on IBKR Pro will probably better suit frequent traders who regularly make large trades.
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That said, IBKR Campus is among the best education resources of all the trading platforms we reviewed. You’ll find a wealth of beginner and advanced information with IB newsletters, webinars, podcasts, news and analysis. It’s this impressive and robust education platform that helped IBKR make our list, despite its relatively confusing commission and fee structure.
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IB has some of the best margin interest rates in the business. The firm provides a margin interest rate calculator so you can determine exactly what you’ll pay. As an example, IBKR Pro users can expect to pay 6.83% interest on a $10,000 margin loan balance, while Lite clients pay 7.83%.
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Even though it looks, feels and acts like a platform for experienced traders (because it is), Interactive Brokers offers fractional share investing on eligible US, Canadian and European stocks as well as ETFs where available.
Pros
- Excellent educational resources for all trading levels
- Some of the best margin interest rates you’ll find
Cons
- Commission and fee structure requires careful consideration
- IBKR Pro platform might be too much for beginners
Who should use it?
Beginners who want to trade in a professional environment will get all that and more with Interactive Brokers.
Firstrade
Best for do-it-yourself options traders
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Automated investing option
No
4.4/5
Why we picked it
If you’re looking to trade options predominantly or exclusively, Firstrade could be the online brokerage you need.
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Firstrade charges zero commissions to trade stocks, ETFs and options. Firstrade does not charge assignment/exercise or per contract fees on option trades, other than the few cents collected by regulators. There is also no charge for streaming or real-time quotes. While you can find better margin rates elsewhere, Firstrade’s 13.75% interest charge on balances of less than $25,000 is competitive.
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Firstrade’s options trading platform is easy to use and contains myriad features to help beginners construct, analyze and understand the risk-reward profiles of their trades before they enter them and maximize profits. Of all the brokerages we reviewed, Firstrade has the best options education platform and various ways to efficiently and easily look for trade ideas.
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Beyond options, Firstrade remains a solid choice. The brokerage offers fractional share investing in more than 4,000 stocks and ETFs.
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On the downside, Firstrade does not offer robo-advisory or access to human financial advisors.
Pros
- One of the lowest commission and fee structures in the business
- Impressive options trading platform
Cons
- No one-on-one financial advice or automated investing
- While competitive, you can secure more attractive margin rates elsewhere
Who should use it?
DIY traders and investors who focus on options will want to strongly consider Firstrade.
E*TRADE
Best for long-term investors who trade occasionally
Tradable asset classes
Six
Commissions & fee
$0 stock & ETF commissions/$0.65 per option contract
Automated investing option
Yes
4.3/5
Why we picked it
Thanks, in part, to it being part of legacy investment firm Morgan Stanley, E*TRADE has one of the best education centers of all the brokerages on our list. E*TRADE customers have access to Morgan Stanley’s proprietary research, a wide range of basic educational material and automated investing services via E*TRADE’s pre-built and Core portfolios — all fantastic features for investors new to trading who want to learn, be informed and test the waters.
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That said, E*TRADE limits fractional share stock purchases to mutual funds and ETFs in Automatic Investing accounts if you agree to make automatic investments of at least $25 per month. E*TRADE uses the standard zero-commission structure on stocks, ETFs and options and a $0.65 fee per option contract, which it lowers to $0.50 if you execute at least 30 stock, ETF or option trades per quarter.
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E*TRADE’s trading platform is easy enough to navigate for beginners and sophisticated enough for advanced traders, however, its margin interest rates are somewhat steep, particularly for small investors. As of June 2024, E*TRADE charges 14.2% on margin balances of less than $10,000 and 13.95% up to $25,000.
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You can access E*TRADE’s basic automated investing service (Core portfolios) with a $500 minimum balance for an annual advisory fee of 0.3%. Access to a Morgan Stanley financial professional comes at a higher cost depending on your relationship status with the firm.
Pros
- Easy-to-use trading platforms
- Industry-standard, low commission and fee structure
Cons
- Relatively high margin rates, especially on relatively low balances
- No fractional share investing in self-directed accounts
Who should use it?
Investors who will trade occasionally but prefer to focus on long-term investing should consider E*TRADE.
Public
Best for frequent but basic-level option traders
Tradable asset classes
Six
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Automated investing option
No
4.3/5
Why we picked it
Public is another trading platform for beginners that option traders might find intriguing.
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While Public doesn’t pay for order flow on stocks, it does for options orders. And it gives some of the money it makes back to its users. According to Public, it shares up to half of the revenue payment for order flow produces, resulting in a rebate of up to $0.18 per contract. The fact that Public only charges $0.03 per contract to cover regulatory fees makes this offer all the more alluring. Public also offers zero-commission trading on stocks and ETFs.
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There’s a flip side to all of this. Primarily, Public currently only offers the following options strategies: long calls, long puts, covered calls and cash-secured puts. Public says it plans to include more advanced strategies soon.
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Public recently started offering margin trading, however, it does not make its interest rate schedule publicly available.
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While Public doesn’t have a full-fledged robo-advisory service, it does offer automatic, recurring investments. Users can select their own stocks, ETFs or cryptocurrency or select from an “Investment Plan” pre-built around an investing style, risk profile, geography or theme. Public charges $0.49, $0.99 or $1.99 per recurring purchase, depending on the number of positions in your plan, and 1.25% of the total on cryptocurrency orders. However, it waives the recurring purchase fee if you’re a premium member, which costs $8 a month unless you have an account balance of $20,000 or higher.
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A premium membership includes extended hours trading, enhanced customer service and subscriber-only content and analysis — all features that come for free with many of the other names on our list.
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While most of the names on our list offer cash management or sweep accounts that earn at least some interest on uninvested cash, Public’s high-yield account takes the cake with no fees and, as of June 2024, a 5.1% annual percentage yield (APY).
Pros
- Low commission and fee structure
- Especially attractive pricing for frequent but basic option traders
Cons
- Limited option strategies
- Premium tier includes features that are free at most other brokerages
Who should use it?
Traders who plan to trade options frequently and want to earn a high interest rate on uninvested cash should consider Public.
Robinhood
Best for cryptocurrency traders
Tradable asset classes
Five
Commissions & fees
$0 stock & ETF commissions/$0 per option contract
Automated investing option
No
Why we picked it
Robinhood continues to increase its presence in areas beyond investing, which, like SoFi, might make it an attractive option for new traders looking for a one-stop shop.
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On the basics, Robinhood offers commission-free stock, ETF and options trading. On options, it only charges $0.03 per contract to pay the regulators. It also charges no commission on cryptocurrency purchases and offers the ability to make automatic, recurring purchases.
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Robinhood charges a margin interest rate of 6.75% on balances up to $50,000 for basic accounts, which is very competitive, and Gold subscribers even get the first $1,000 interest-free. This is one of the many perks of a $5 per month Robinhood Gold subscription, which also includes a 5% APY on uninvested cash, 3% cash back with the Robinhood Gold credit card, a 1% bonus on all deposits and a 3% match on all annual contributions to a Robinhood individual retirement account (IRA).
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Robinhood’s platform for all types of trading is intuitive, easy to navigate and includes useful features such as advanced charts and strategy builders. Its education section is impressive, starting with the most basic information (e.g., “What is a stock?”) and moving into more advanced territory on stocks, ETFs, dividends, diversification and options trading.
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With $1, you can trade fractional shares on Robinhood.
Pros
- Low commission and fee structure
- Attractive perks for Robinhood Gold subscribers
Cons
- No robo-advisor option
- You can receive some of Robinhood’s Gold perks for free at other brokerages
Who should use it?
Traders who can benefit from low-cost cryptocurrency trading and a Gold subscription should consider Robinhood.
Our picks at a glance
| Company | Tradable asset classes | Commissions & fees | Automated investing option |
|---|---|---|---|
Fidelity Investments | 7 | $0 stock & ETF commissions/$0.65 per option contract | Yes |
Merrill Edge | 6 | $0 stock & ETF commissions/$0.65 per option contract | Yes |
SoFi | 5 | $0 stock & ETF commissions/$0 per option contract | Yes |
Webull | 5 | $0 stock & ETF commissions/$0 per option contract | Yes |
Charles Schwab | 6 | $0 stock & ETF commissions/$0.65 per option contract | Yes |
Interactive Brokers | 7 | $0-$0.005 stock & ETF commissions/$0.15-$0.65 per option contract | Yes |
Firstrade | 6 | $0 stock & ETF commissions/$0 per option contract | No |
E*TRADE | 6 | $0 stock & ETF commissions/$0.65 per option contract | Yes |
Public | 6 | $0 stock & ETF commissions/$0 per option contract | No |
Robinhood | 5 | $0 stock & ETF commissions/$0 per option contract | No |
What to consider when choosing a trading platform for beginners?
- Educational resources: While even platforms for advanced traders contain education, the extent, quality and cost varies. If you’re a beginner, you might want education that’s free, easy to access and made for beginners. The best trading platforms for beginners tend to create content and design modules appropriate for traders at that level.
- Simulated trading: Many trading platforms appropriate for beginners provide access to mock trading accounts where you can “paper trade” without risking real money. Before you put your capital on the line, you’ll want to feel comfortable with trading in general as well as your platform’s interface.
- Low account minimums: If you plan on frequent day trading (see how the government defines “day trader” below, you’ll need a minimum of $25,000. However, if you don’t fit the definition of a day trader — and most beginners should approach day trading with caution — as a beginner, you might want a trading platform with a low barrier to entry in the form of required minimum investment amounts and balances.
- Low trading costs and account fees: Most trading platforms suitable for beginners charge nothing for stock and most ETF transactions and low fees to buy and sell options contracts. No matter your frequency or style of trading, minimizing these costs can help maximize your returns.
What is a trading platform?
Think of a trading platform as a tool inside your brokerage account or investment app.
Trading platforms are software programs that allow investors to trade and manage their positions efficiently and securely. Generally, the more advanced the platform, the more bells and whistles, in number and sophistication.
Our guide to the best trading platforms for beginners focuses on the easiest-to-use commercial trading platforms. That is, trading platforms built for retail investors. We did not look at commercial platforms, known as proprietary (prop) trading platforms utilized by large institutional and otherwise professional investors.
Features to look for in a trading platform for beginners
Advanced trading platforms tend to have many moving parts. A slew of customizable and often complicated features can make it hard to confidently complete basic tasks, such as investment selection and order entry, when trading. Therefore, beginners should look for a trading platform that puts the basics, such as entry-level technical analysis, clear instructions for how to place different types of orders and stock price information, front and center.
Alongside keeping it simple, beginners should look for comprehensive educational resources in a trading platform. From guides that detail how to make specific trades to educational modules and instructional videos, the top trading platforms for beginners help ensure you know what you’re doing before you take on financial risk.
Closely related, simulated trading is an excellent feature to look for in a trading platform for beginners. Sometimes called a paper money or mock trading account, simulated trading is essentially a platform within the larger trading platform and brokerage account. You can place trades just as you would with real money, minus the risk of taking a loss.
As always, a low fee structure — from trading commissions and fees to charges for other account transactions — matters. When considering a trade, you’ll have to factor in what the trade and associated transaction costs and deduct them from your potential profits.
What type of trading platform is best for beginners?
While some trading platforms offer interfaces for different levels of investors, generally, firms that focus on professional or frequent traders are not well-suited for beginners. See our CNN Underscored guide on the best day trading platforms for our top selections for day and more experienced traders. Beginners will likely want to stay away from platforms geared toward day trading.
To get a handle on the dynamics here, consider how the government defines day traders.
The Financial Industry Regulatory Authority (FINRA) classifies you as a “pattern day trader” if you “execute four or more ‘day trades’ within five business days — provided that the number of day trades represents more than 6 percent of your total trades in the margin account for that same five business day period.”
Pattern day traders must maintain minimum account equity of $25,000. The aforementioned day trading guide gets into further details on the rules, but suffice to say the $25,000 threshold — which can be a mix of cash and qualifying equities — might be an obstacle to entry for many beginners looking to day trade.
There’s a good chance that, if you don’t dive right into day trading, you’ll be a swing trader. Swing traders hold their positions for days or weeks. Like day traders, swing traders must pay close attention to entry and exit points and, most likely, technical analysis and news events. The main difference is the timeframe the swing trader targets to take advantage of market fluctuations.
This guide ranks firms on the basis of what beginners need most and tends to include more mainstream names with platforms suitable for everything from some form of short-term trading to long-term investing. It focuses on what you might look for in a general brokerage account you plan to start your trading activity in.
How to start trading as a beginner
After deciding on the trading platform that best satisfies your needs, these are the steps you’ll need to take:
- Open an account: This process isn’t all that different from opening a bank account online. Choose a platform, enter your personal financial information and link a funding account.
- Practice with paper trading: If available, consider spending time in a simulated trading environment within the platform before you start trading with real money.
- Fund your account: Depending on your brokerage’s onboarding process and required account minimums, this might have to be step two. You’ll typically fund your account via a transfer from your bank account or by transferring cash or assets from another brokerage firm.
- Research trades: This is where educational resources, such as investment screeners, come in handy. Once you understand the mechanics behind what you’re doing — having spent time with your platform’s simulated trading and educational content — it’s time to get specific. Traders often pick stocks and other investments using technical analysis. Others trade on momentum. Many buy and sell stocks or options based on a company’s fundamentals. Some use a combination of these and other approaches. Wherever you land, it’s critical to establish a basis behind and, subsequently, confidence in what you’re doing.
- Place and manage your trade: Settle on your order type (e.g., market, limit, stop, stop-limit, trailing-stop). Enter the ticker symbol you’d like to trade alongside the quantity, then hit — assuming you’re making a straightforward trade — the buy button. When you set up your trade, you will have determined the largest loss you’re willing to absorb and a profit target. You’ll manage it by watching how your position moves and acting in accordance to your profit and loss thresholds.
At some point in the process, your brokerage might ask if you want a margin account or access to options trading.
Margin trading permits investors to borrow money from their brokerage to buy stocks and other securities while using their overall account equity as collateral. Our CNN Underscored guide on how to short a stock details the ins and outs of opening and maintaining a margin account.
Option contracts give the buyer the right to buy or sell an underlying asset, often a stock, at a fixed price until the contract’s expiration date. Options trading requires approval from your brokerage. Depending on your approval level, you might need a margin account to trade options.
In any event, margin accounts and options trading sit in intermediate-to-advanced territory and, generally speaking, can be riskier than trading stocks and other equities in a cash (non-margin) account. While we considered the availability of options trading, we did not weigh margin account particulars, such as the interest you’ll pay on the loan you take from the brokerage, in our review process.
Methodology
To construct our list of best trading platforms for beginners, we examined 24 popular brokerage accounts from both legacy brokerage firms and newer fintech companies, as determined by our team of expert editors. We then scored each platform according to nine key factors:
Tradable assets classes (20%)
Trading platforms offering the ability to trade more asset classes were scored higher, as they give users more flexibility with their investments. Because even beginners might want to trade more than stocks, we considered if the trading platforms we reviewed offer investments conducive to trading, such as ETFs, cryptocurrency and options.
Monthly cost (20%)
Trading platforms that charge users a monthly subscription fee were scored lower, as this can be prohibitive for beginner traders with smaller accounts.
Commissions & fees (20%)
While all the brokerage platforms we examined charge no commissions for stock and ETF trades, option contract fees were factored into our ranking. Many traders buy and sell stocks, options and other investments more frequently than long-term, buy-and-hold investors. Therefore, we weighed this factor heavily, as trading fees can eat away at profits, particularly if you’re moving in and out of your positions over relatively short timeframes.
Minimum to start investing (15%)
Trading platforms that require a minimum investment amount were scored lower. Although minimums are generally low across the board, this poses another barrier to entry for some users.
Automated investing option (10%)
Platforms that offer automated robo-advisor services were scored higher, as they provide beginners a helping hand in getting acclimated to and involved in their investments.
Payment for order flow (5%)
Trading platforms that receive payment for order flow were scored lower, as this may present a conflict of interest between brokers and customers.
Order execution quality (5%)
The more often the brokerage behind a trading platform executes orders at or better than the National Best Bid and Offer (NBBO), the higher it was scored. Trading platforms that do not disclose this information were scored lower.
Company disclosures (2.5%)
Firms with fewer SEC disclosure events were scored higher, as disclosures are an indication of customer complaints, regulatory actions or other legal issues.
SEC registration date (2.5%)
Firms that have been SEC-approved for a longer time were scored higher, as this can indicate a more reputable and reliable company.
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Frequently asked questions (FAQs)
There’s nothing to stop a beginner — other than financial limitations and related rules and regulations — from engaging in advanced trading. That said, it makes sense to start small with your investment and execute basic trades, such as buying and selling stocks. If you graduate to options, it can make sense to start with covered calls and the relatively straightforward process of buying calls and puts. This type of trading generally makes sense before moving into more complex areas.
Ensure that your trading platform has multiple ways to access customer support, ideally with live chat, telephone and email options. We stress the word live. Among the legacy brokerage firms, it’s generally easy to reach a real person by phone, but some fintech firms might only be available by email or online chat.
A common thread throughout our review of the best online trading platforms for beginners is education. So, it’s incredibly important. No matter your level of experience, it makes sense to access educational resources that can further your knowledge. For beginners, forming an initial base of knowledge might help safeguard you from trading and investing mistakes that can cost you real money.
