The Best Online Stock Broker – And How to Get Started & Take Those First Steps
Approximate Reading Time: 5 Minutes Time Required to Open an Account: 2 hours work plus 5-6 days waiting period
- I recommend OptionsHouse. While I’ve used Fidelity & Interactive Stock Broker previously, I’ve found OptionsHouse to provide the best value & customer support
- I place all my trades using their Android App, and have never had an issue (yes, I know it has bad reviews but I use it every day)
Choosing an online stock broker can be very stressful – and everyone has an opinion. The good news is that there aren’t substantial differences between the top online brokers. Also, your income will not be materially impacted by your choice – so please don’t get anxious when deciding.
I highly recommend OptionsHouse for the following reasons (you may not understand all of the reasons below, don’t worry about it, it’s not super important):
- It’s cheap – $4.95 base plus 50 cents per contract
- Their customer support is personable, knowledgeable and very responsive
- Their App is great (I don’t use the desktop software) & I can place trades from any location
- I can close trades without paying commission as long as the option price is 10 cents or less
- I frequently get filled at a better price than my limit price (price improvement: I’ll sell for a slightly higher price & buy for a slightly lower price)
I’ve read a few complaints about OptionsHouse’s lack of research, but if you’re reading research reports then you probably won’t make any money. I know this last statement is controversial, but most of the available stock analysis should be viewed as entertainment. Yes, of course an occasional person will be correct with their analysis and predictions, but the odds are not good and, overall, reading research (or listening to “stock experts” on CNBC) is not a good usage of time.
Prior to selecting OptionsHouse, I tried Interactive Brokers & Fidelity. They were okay. Interactive stock Brokers is difficult to use. Fidelity is expensive, and it felt more antiquated and less flexible.
To open an OptionsHouse account, you’ll need a SSN (or ITIN) number. There is no account minimum to open an account (meaning that you can open an account with $0 if you’d like). However, you’ll need to deposit at least $2,000 in order to have a margin account and be approved for options trading.
OptionsHouse is currently providing 100 commission-free trades when you open and fund an account with $5,000 or more within 60 days of opening your account.
The OptionsHouse signup link is an affiliate link. I earn 30 free trades if you click the link to signup and fund your account with a minimum of $1,000 within the first 60 days. While it may seem that I have a conflict of interest by recommending a company that I have an affiliate relationship, I wouldn’t use or recommend OptionsHouse unless they were the best.
Once your account is open, OptionsHouse will automatically create a PaperTrade account where you can place fictitious trades without risking any money. You can place practice trades in your PaperTrade account to learn the skill of trading options.
Remember that when learning a new skill, it’s important to not become overwhelmed. Try to focus on taking small steps (open an account, place a few trades in the practice account, etc.) so that you make incremental progress towards your goal of doubling your money every year.
Stock Broker Conclusion
I recommend OptionsHouse (click the link to signup) – it combines great pricing, with excellent customer support and a good App.
When learning a new skill, focus on making incremental progress every day or week. For example, open an account one week, place a few practice trades the next – that way you’ll soon start to feel comfortable.