How to find the best stock trading platform for online investing

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Wealthsimple Trade Stock Trading Account

Buy and sell thousands of US and Canadian stocks and ETFs commission-free. Get a $25 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.

• Account fee: $0
• Stock fee: $0
• ETF cost: Free

• No commissions
• No account fee
• Self-directed investing

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We’ll walk through how to compare the best online stock trading accounts in this guide to find the right one for your needs.

Getting started with trading stocks

The goal of stock trading is to generate wealth in one of the following ways:

• Earn money from capital gains when the value of your stocks goes up
• Earn income when a company pays its shareholders dividends after earning a profit
• A combination of the above

As with any other investment, stocks can be risky. There’s a chance you could lose your money, so be sure you’ve carefully weighed the benefits and the risks before you start trading.

How to find the best stock trading platform for your needs

Many people naturally start looking for the best stock trading platform by heading to their local bank. All of Canada’s major banks — including TD, CIBC, RBC, BMO and Scotiabank — offer in-house online investing options that offer a range of securities and trading accounts.

For example, TD Direct Investing and RBC Direct Investing are both popular with Canadian investors who want flexible trading options and convenient access to their portfolios.

While it may be convenient to go with your bank, other platforms might offer lower fees or a more features. Consider the following points when comparing online investment services:

• Fees

• • Trading fees. Most investment platforms charge a fee every time you buy or sell securities. However, this fees maybe waived if you maintain a certain account balance or conduct transactions on a regular basis. Fees can really add up if calculated as a percentage of the transaction.
  • Annual or monthly maintenance fee. Some companies may waive this fee if you maintain a minimum account balance or earn a certain amount of profit each quarter.
  • Management expense ratio or MER. This is charged for investments that are handled and maintained by professionals. Examples include many types of mutual funds and investments geared towards “set it and forget it” investors who don’t want to actively monitor their portfolios.

• What types of stocks can I trade?

Most online investing platforms give you access to domestic and international stocks, allowing you to trade shares of large well-known companies from around the world. Many platforms will also allow you to trade CFDs (contracts for difference), forex (foreign exchange), indices (such as the S&P 500, the Dow Jones and the NASDAQ) and much more.

• Ease of use

Trading stocks can be complicated. Some types of investment strategies require quick responses to market changes. Look for a platform that facilitates fast and precise trades with little hassle.

• Your personal needs

If you’re just a casual investor, do you really need an investment platform that offers a lot of bells and whistles? On the other hand, some platforms aimed at beginner traders may not have all the features an experienced investor needs.

• Margin loans

A margin loan lets you borrow against the vale of your stocks to buy more stocks. You may be interested in this risky investment strategy if you want to expand your portfolio.

• Access to market data, relevant reports and useful research

Your trading decisions will be partially based on market conditions at any given point in time, so check to see if your platform provides dynamic, real-time market updates and tools for predicting and interpreting economic trends.

• Ways to trade

Can trades only be submitted online, or can you also buy and sell over the phone? Are brokers available 24/7? How long are the wait times? It can be helpful to check out client reviews on sites like the Better Business Bureau or Trustpilot.ca.

• Trade options

Consider the options available when you are buying or selling shares. In addition to present-time trades, can you also hedge against risks by placing market orders, limit orders or stop orders?

• Professional support

Is 24/7 support available if you need help with a trade? Ideally, you’ll have direct access to a dedicated account agent, but you should also look for online help centres, live chat options and phone support.

• How-to guides and educational resources

Does the platform offer educational tools and resources like how-to guides and webinars to help you get more out of your trading account?

• Security

How secure is the platform, and what measures are in place to protect the safety of your funds? What processes are in place to prevent fraud?

Compare online stock trading platforms

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Name	Product	Available asset types	Stock Fee	Option Fee	Account Fee	ETF Transaction Cost
Wealthsimple Trade		Stocks, ETFs	$0	N/A	$0	Free	Get a $25 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.	Go to site More Info	Compare	loading Fetching your data...
Questrade		Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, IPOs, Precious Metals	$4.95 - $9.95	$9.95 + $1 per contract	$0	Free	Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.	Go to site More Info	Compare	loading Fetching your data...
Interactive Brokers		Stocks, Bonds, Options, Mutual Funds, ETFs, Currencies, Futures, Precious Metals	Min. $1.00, Max. 0.5% of trade value	$1.50 min. per order	$0 (if monthly commissions are equal to or greater than US$10.00)	Min. $1.00, Max. 0.5% of trade value	Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.	Go to site More Info	Compare	loading Fetching your data...

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How to find the best stock trading platform for you

When searching for the best stock trading platform for you, ask yourself the following questions:

• What type of stock trader am I? Are you a casual trader, an active trader or an experienced investor? From the user-friendliness of a platform to the level of market research and educational tools that come with your account, it’s important to find an investment service that works with your trading needs.
• How often will I trade? If you buy or sell shares infrequently — say, 1-2 times per month or less — you’re likely more of a casual investor. With a higher trading frequency comes the need for an online investing platform that offers an affordable tier structure and an extensive range of features.
• What will I be trading? While stocks are a very commonly-traded security, you may also want to buy and sell other securities such as bonds, CFDs, currencies, options and futures. Also consider whether you want to trade domestic securities, international securities or a combination of the two.
• What will it cost me? Besides ongoing management and account maintenance fees, consider trading fees and whether you can get these fees waived or reduced if you satisfy certain criteria.

I’ve found the best stock trading platform for me. How do I apply?

Once you’ve found the best stock trading platform to make online investments, it’s usually pretty easy to apply to open an account. If the platform is run by your bank and you can access online banking services, you can usually initiate or even complete the application process by logging into your online banking portal. If approved, you’ll likely be able to access online investment services through this portal as well.

When applying for an account with an investment services provider, you’ll typically need to provide the following:

• Your name, address and contact details
• Proof of identification (scanned and electronically sent to the investment company) such as a valid driver’s license or passport
• Proof of your income or the source of the funds that you plan to invest
• Employment details like where you work, how much you earn and how to contact your employer
• Proof that you have reached the age of majority in the province in which you live (either 18 or 19 years old)
• Proof of any any prior financial trading experience (if required). Platforms geared towards more experienced investors may require you to prove that you know what you’re doing, but many platforms are open to brand new investors.
• Your bank account details to support transfers to and from your regular bank account and your investment account(s)

Once you’ve deposited funds into your account you’re ready to start trading. Note that a minimum deposit amount may apply.

Glossary of stock trading terms and concepts

• TSX: The Toronto Stock Exchange (TSX) is where stocks from many top, publicly-traded Canadian companies are bought and sold.
• S&P/TSX Composite Index: The foremost investment index in Canada, the S&P/TSX Composite Index tracks the performance of around 250 companies listed on the TSX, which is about 70% of the total market capitalization on the TSX.
• Bear (or “bearish”) market: This term refers to a time period in which stock prices fall significantly due to pessimistic behaviour on the part of investors, an economic recession and/or weakened sectors or industries.
• Brokerage fee: This is a fee you must pay to a stock trading platform when you buy or sell shares on its platform.
• Bull (or “bullish”) market: This term refers to a time period in which stock prices rise significantly due to optimistic behaviour on the part of investors, an economic upswing and/or strengthening sectors or industries.
• Contract note: This confirms a buy or sell transaction and includes details such as the type of share, the price paid and the quantity traded.
• Dividend: Companies can distribute profits or earnings to shareholders in the form of dividends. A dividend is calculated as payment amount per share, so the amount you’ll receive is this amount multiplied by the number of shares you own.
• Float: An amount of capital initially raised through public subscription to a security.
• Fundamental analysis: An analysis of a business’s financial statements to determine the company’s value and financial strength.
• Futures: Contracts to buy or sell an asset at a specified date in the future.
• Limit order: When buying, a limit order places a predetermined ceiling on the amount being spent to acquire shares. When selling, a limit order triggers a sale when a minimum payment price is offered by a prospective buyer.
• Listed company: A company that appears on a stock exchanges (like the TSX or NYSE), which happens when stocks of that company become available to be bought and sold by investors.
• Live price: This is the real-time price of a share at this precise moment in time.
• Market order: A market order is an order to buy or sell a share at its current market price
• Short selling: This is when you borrow a security and sell it assuming it’s price will go down. If it does, you buy back the shares and repay the original owner, pocketing the difference between what you paid to sell the shares and what you paid to buy them back. If you’re wrong and the price of the shares rises, you end up losing money. Short selling is considered a very risky investment strategy and should only be attempted by experienced investors.
• Volatility: This reflects the degree to which share prices fluctuate. Higher volatility means a higher risk of loss, while lower volatility means lower risk and a safer, more predictable return.
• Warrant: This gives its holder the right to purchase a security at a certain price within a certain timeframe.
• Yield: This is the return on your investment expressed as a percentage.

Frequently asked questions about stock trading

• What's the difference between a market order and a limit order?

  When you place a buy or sell order, you will need to select whether you want to place it ‘at market’ or ‘at limit’. Market orders will be executed at the best available price on the market at the time the order is lodged, while limit orders allow you to set a maximum (when buying) or minimum (when selling) price limit for your transaction. If your limit price is never reached on the market, your order will not be executed.

• Can I try out stock trading platforms before applying for an account?

  Yes, many providers will allow you to open a demo account and perform fake stock trades to get a feel for how the system works. This can be a great way to determine whether a certain platform is right for you.

• How do I make money from buying and trading stocks?

  There are a couple of ways in which you can generate wealth through stocks:

  • Buying a selling. You earn a profit by selling stocks for more than you paid to buy them. A key stock trading skill is knowing how to find and buy (1) undervalued stocks that you can sell for a higher price or (2) stocks issued by companies with strong financial futures in the hopes that these stocks will rise in value.
  • Holding stocks that pay dividends. You earn money on stocks issued by companies that regularly pay dividends, or a portion of its profits paid to shareholders.

• What does it mean to diversify my stock portfolio?

  “Diversifying” your stock portfolio is a risk-reducing strategy in which you buy stocks across a wide range of industries, markets and investment opportunities. If one stock investment fails, you still have other stock investments to rely on. Whereas, if you invest in one company or industry alone, and that company or industry takes a down turn, you could lose a lot, or even all, your money.

• Is stock trading complicated?

  Trading stocks is a fairly straightforward process. Getting used to the tools and resources that let you do so can be complicated, depending on which platform you use. Some investment platforms have a steeper learning curve than others. The best stock trading platform for you will depend on the time and effort you’re willing to put into managing your investments yourself.

  If you really don’t want to have to deal with the learning curve, look for online investment services that offer professional help. Robo advisors provide an excellent way to “set and forget” your investments by using algorithms to determine an the best investment strategy for you and automating the maintenance of your account.

• Do online brokers provide advice on which shares to buy?

  Yes, depending on the stock trading platform you choose and possibly on the level of membership you choose, you may very well be able to access expert stock recommendations.

• Can I trade international stocks?

  Yes, many online stock trading platforms provide access to international securities. But not all do, so if you’re interested in buying and selling international stocks, make sure you verify this before registering for an account.

• Can I open a joint investment account with my spouse?

  That depends on the investment service provider you go with. Some offer joint accounts, while others don’t, so check with your provider to find out for sure.

• Can I cancel or change an order after I have placed it?

  You can, as long as the order is still open and has not been executed (processed). However, keep in mind that market orders are placed instantly, so this option only realistically applies to limit orders.

• How do I learn more about stock trading?

  The best approach to improve your trading skills is to expose yourself to information from a wide variety of sources. From trading strategies to financial news, company announcements and market activity, staying up to date with anything related to any industries or companies you’re interest in — or to the domestic and international economy at large — will help you know what decisions to make.

  Consider taking an investment course offered by places like Udemy, Morningstar’s Investing Classroom or Skillshare. These types of courses of often taught by licensed, experienced professionals with years’ worth of knowledge to pass on. Make sure you only study with a trusted educational institution or training organization.

• Can I borrow money to buy stocks?

  Yes, there are 2 main approaches to borrowing money to purchase stocks:

  • Margin lending is offered by some banks and large stockbroking firms and involves using your existing, shares or managed funds as security.
  • Using the equity in your home to take out a loan for investment purposes.
  • Unsecured loans, although these will have high-interest charges.

  However, remember that there are many risks associated with borrowing money for an investment on which returns are far from guaranteed. Generally, you should avoid borrowing to invest unless you’re an experienced investor and are sure that you can repay the loan if your investment fails.