Brokerchooser blog - Shares


How to buy shares online

How to buy shares online
| Gergely Korpos Gergely Korpos

I am pretty sure you already imagined several times to invest in the stock exchange, gain enough cash to travel the world and rest for your entire life.

Achieving this vision is not easy but you have to start somewhere, and to purchase shares online is one of the best ways for that. The good news is you can do this fully online. In this article I will explain jargon-free how to invest in shares online. It is not as easy as watching TV series, but don’t worry it is not rocket science either.

There are two main motivations for you to ask the question: how to buy and sell shares online. The first is profit and the second is experience.

Both can provide fun if you select the right stocks.

If the share you bought pays dividends or its price increases, you can make a profit. If you do this in the long run, these profits can add up and make you even a millionaire, like it happened with Mr. Gremel. The 98-year-old Mr. Gremel bought 20 Walgreens shares for $1000 in 1953. This investment today is worth $2 million.

 

why-to-buy-shares

 

On the experience side, you will improving your financial literacy is one of the best long term investments. Did your friends or neighbours talk about investments and the stock market, and you had no clue about the topic? Once you start investing and learning about it, this will not happen again. You will understand better how the stock market works and how it influences the economy and your everyday life.

Last but not least, as a shareholder you will be part of a company's story. Want to know how to buy company shares? Have you ever wanted to participate in a Berkshire Hathaway annual meeting? If you buy some Berkshire shares, you will have the opportunity, just have to master the buying of shares.

Let's take a look at the six steps to buy shares online.


Best online brokers in 2018

Best online brokers in 2018
| Gergely Korpos Gergely Korpos

To make sure you choose the best online broker for your needs we went ahead and did a thorough research for you. Without such research picking a broker based on ad-hoc preferences is just a guess game. The evaluation criteria contain but is not limited to fees, funding process, withdrawal methods, offered products, ease of account opening and the trading platforms each offer.

After testing 16 online brokers, 6 brokers made it to the top which we highly recommend for you. This selection contains Brokerchooser's four highest-ranked stockbrokers, the highest-ranked forex broker, and the highest-ranked CFD broker.

And now, without further ado… The top 6 picks for the best online brokers in 2018:

Broker Description From which regions you can open an account?
Saxo Bank Danish investment bank Worldwide except for the US
Interactive Brokers Leading discount broker from the US Worldwide
Strateo Swiss online broker Europe
DEGIRO Upcoming Dutch discount broker Europe
Pepperstone Australian discount forex broker Worldwide except for the US
IG Leading CFD broker from the UK Worldwide except for the US

Regarding the selected brokers, only Interactive Brokers is available for US clients. 

If you want to check precisely which broker is available from your country, visit our country selector.

  Saxo Bank Interactive Brokers Strateo DEGIRO Pepperstone IG
Fee structure ★★★★ ★★★★★ ★★★ ★★★★★ ★★★★ ★★
Funding and withdrawal ★★★★★ ★★ ★★★★ ★★★ ★★★★★ ★★★★★
Account opening ★★★ ★★ ★★ ★★★★ ★★★★★ ★★★
Product portfolio ★★★★★ ★★★★★ ★★★★★ ★★★★★ ★★ ★★
Trading platform (web) ★★★★ ★★ ★★★★ ★★★★ ★★★★★ ★★★★★
Overall rating 4.5 3.9 3.9 3.8 3.8 3.6

 

All selected broker's portfolio contains CFD products. They are complex and very risky, thus not suitable for everyone. You can easily lose all of your invested money. If you don't have clue what a CFD is, start by reading more about CFD trading. Just a short FYI for US customers: CFD trading is banned in the US.

Not sure which one to choose? For a personal broker recommendation, check out Brokerchooser's broker selection tool. You input your preferences and you get a personal recommendation fitting your needs.

Want to see more options? For comparing all the brokers, visit our comparison page.

Best-online-brokers-blogpost

What is an online broker?

Thirty years ago if you wanted to buy a stock, you had to pick up the phone and call your broker, who executed the transaction in return for a commission. Brokers were like in the Wolf of Wall Street movie. They were checking the stocks' prices while holding telephone and shouting.

Everything changed after the internet appeared. Nowadays if you want to buy Apple shares, you open online an account, deposit money, and make the order through the brokers' online platform. These brokers are the online brokers.

Online brokers help you buying and selling securities, like stocks. After making your order, the online broker executes it immediately. Everything is online.


Best discount brokers in 2018

Best discount brokers in 2018
| Gergely Korpos Gergely Korpos

Choose the best discount broker, we did the research for you. We tested in-depth only quality online brokers available for European and US customers. We evaluated fees, funding, withdrawal, product portfolios, account opening, trading platforms and more.

As a result, we filtered out the online brokers with the lowest fees and the highest quality.  

Our top eight picks for the best discount brokers in 2018 are:

Broker Description From which regions you can open an account?
Interactive Brokers Leading discount broker from the US Worldwide
DEGIRO Upcoming Dutch discount broker Europe
tastyworks Upcoming US low commission option broker Europe, US, Latin America
Tradestation Large discount broker from the US Worldwide
Pepperstone Australian discount forex broker Worldwide except for the US
Oanda US discount forex broker Worldwide
eToro CFD broker specialized in social trading Worldwide except for the US
Markets.com Discount CFD broker Worldwide except for the US

Head to our country selector to get detailed info on which broker is available in your country.

We have created three online broker categories: discount stockbrokers, discount forex brokers and discount CFD brokers. The three groups substantially differ in several areas, like fee structure, so it makes sense to create the three peer groups. This categorization will also help you to easily find a cheap stockbroker, forex broker or CFD broker.

The best discount broker for beginners is DEGIRO. It has an easy-to-use trading platform and very low fees.

 

BEST DISCOUNT STOCKBROKERS

  Interactive Brokers DEGIRO tastyworks Tradestation
Fee structure ★★★★★ ★★★★★ ★★★★★ ★★★★
Funding and withdrawal ★★ ★★★ ★★ ★★★
Account opening ★★ ★★★★ ★★★★
Product portfolio ★★★★★ ★★★★★ ★★ ★★★
Trading platform (web) ★★ ★★★★ ★★★★ ★★★
Overall rating 3.9 3.8 3.7 3.5

 

BEST DISCOUNT FOREX BROKERS

  Pepperstone Oanda
Fee structure ★★★★ ★★★★★
Funding and withdrawal ★★★★★ ★★★★
Account opening ★★★★★ ★★★★★
Product portfolio ★★ ★★
Trading platform (web) ★★★★★ ★★★★
Overall rating 3.8 3.6

 

BEST DISCOUNT CFD BROKERS

  Markets.com eToro
Fee structure ★★★★★ ★★★★
Funding and withdrawal ★★★★★ ★★★★
Account opening ★★★★★ ★★★★
Product portfolio
Trading platform (web) ★★★ ★★★
Overall rating 3.6 3.2

CFDs are complex and very risky products, thus not suitable for everyone. You can easily lose all of your invested money. Start by reading more about CFD trading if you don't have a clue what a CFD is. Just a short FYI for US customers: CFD trading is banned in the US.

Not sure which one to choose? For a personal broker recommendation, check out Brokerchooser's broker selection tool. You input your preferences and you get a personal recommendation fitting your needs.

Want to see more options? For comparing all the brokers, visit our comparison page.

What is a discount broker?

A discount broker by definition is a brokerage company that executes your buy and sell orders at a low trading fee. Discount broker's fees can be lower since they don't provide extra services like full-.service brokers. These extra services include research, personal investment advice, tax planning or robo-advisory.

Discount brokers were appearing with the wider penetration of the internet and the online broker services. Brokerage companies started to provide their service online and fully automatized. This was the rise of the online trading platforms. An online trading platform is basically a website, where you can insert your own orders and you get only a customer support, no investment advice. 

The distance between the full-service brokers and discount brokers has been narrowing in the last 5-10 years. Discount brokers started to provide extra services as well, like research, while full-service brokers started to lower their fees.The full brokerage and wealth management industry is under a fee pressure thanks to the more and more cost-effective online broker companies.

Nowadays, the new discount brokers are the free-trade brokers. These provide commission-free trading and charge an extra fee for ancillary services, like after hour trading. The biggest free-trade online broker in the US is Robinhood. In the UK, Freetrade is planning to launch its trading app this year. Stay tuned, we will come out with a Robinhood and Freetrade broker reviews soon.