Before you get started searching for the best stock broker, you should first make sure you understand the two primary types of orders when purchasing stock: market and limit. When a market order is placed, it will be immediately filled at the prevailing market price. For example, if you enter to buy 5 shares of Apple, the trade will be filled by matching it with someone who wants to sell shares of Apple, though not a know price. With a limit order, the trade will only be completed at a particular price. For example, if you want to buy 20 shares of Target at $50 per share, the order will only go through if the broker is able to fill it at a price of $50 per share.
Stick with market orders if you need to get an order filled ASAP. Limit orders are better if you have a budget and only want to spend so much per share. If you’re lucky and get a good broker, you might get your limit order filled at a fair price anyway.
How to Choose the Best Stock Broker?
Speaking of brokers, how can you choose a good one? To find the best stock broker for beginners, consider the following:
• Attainable minimums – A great advantage of online trading is that there is an opportunity to start small. If you’re not yet ready to go all in, then find a broker who is willing to work with those new to investing and don’t have a lot of money to start off with.
• Reasonable pricing – Don’t just look for low commissions – look for a service that will allow you to create and maintain an account without charging too many fees. You should never be charged with any hidden, unnecessary fees.
• Educational Tools – The best stock broker will actually provide his or her clients with the tools and resources they need to help learn about trading on their own, in order to help make better decisions in the future. Having access to tons of resources can be a very valuable asset.
• Range of options – Don’t just choose a “stock” broker who is just that, and nothing else. Look for one who will offer you the option to invest in more than individual stocks. What about bonds? EFTs? What if you decide to start a CD account?
• Associations and reputation – It’s well-worth the time to do a background check on online broking firms before making your decision. Do the obvious things like read reviews and check for fraud alerts. Make sure you choose services from someone who is a member of organizations such as SPIC and FINRA.
Final Remarks
There is at least one organization that meets all of these requirements for the best stock broker: Zacks Trade. It offers a great deal of learning materials for newer and mid-level traders, and an intuitive workstation for the more advanced ones. There are a lot of positive Zacks Trade reviews from industry-leading sites.