Investor demand for online trading services is growing. Here’s a short list of the top-rated platforms for accessing international markets online.
Investor demand for online trading services is growing, largely due to changing demographics among retail investors and advances in smartphone and mobile app technology. In response, the top online brokers are investing heavily in mobile technology.
Since 1995, average trading revenues for online brokers have been on the rise as an increasing number of “self-directed” investors turn away from traditional brokerage firms.
These self-directed investors are increasingly tech savvy, and are attracted to the latest mobile applications, which make online stock trading on a smartphone both quick and easy.
Today, mobile logins account for more than half of total online brokerage account activity, and mobile-only investors make up 25 to 30 percent of the total customer base, according to Barron’s.
One mobile app making headlines is Robinhood, which allows US-based customers to buy and sell any US-listed stock or exchange-traded fund (ETF) without paying commission.
Inspired by the 2008 financial crisis and the Occupy Wall Street movement, founders Vlad Tenev and Baiju Bhatt set out to create trading tools that would effectively “democratize access to the markets.”
The app launched in March 2016, and by August of that year transactions on the platform had broken the US$1 billion mark. In 2018, Robinhood users gained the ability to invest in international stocks through American Depository Receipts; in 2019, transactions on the program totaled an impressive US$150 billion, and as of 2020, the app had 13 million users.
The emergence of electronic trading has considerably cut the cost of intermediary fees and has greatly increased market access for a wide range of investors as online companies vie for their patronage.
In late 2019, all the leading online brokers nixed their trading commissions to compete with Robinood. By early 2020, zero commissions were the new standard. Besides offering low-cost — or no-cost — access to markets, online trading platforms are increasingly adding international trading to their services.
For those interested in learning more about accessing international markets online, the Investing News Network has curated a short list of the top online brokers recommended by financial researchers and analysts at NerdWallet.com, Casey Research, StockBrokers.com and Barron’s.
1. Fidelity Investments
Fidelity Investments is consistently rated one of the top online brokers, with high marks for its trading platform, mobile app technology and access to international trading in markets across North America, Europe and Asia’s South Pacific. “Fidelity is one of the most well-rounded brokerages available today, with no commissions on stock trades, ETF trades or options trades and a selection of no-expense-ratio index funds,” explains NerdWallet in its review of the firm.
For its part, Casey Research gives Fidelity high marks for its “perfectly decent interface and reasonable commissions and currency exchange rates” and calls it “the best choice for many investors looking to trade on foreign exchanges. You can trade directly on 12 major foreign exchanges.”
Stockbrokers.com is also impressed with the company’s international trading, saying if you reside in the US and want to invest on foreign exchanges using local currency, then Fidelity is one of the best brokers to consider. Barron’s agrees, giving Fidelity the top spot in its 2020 survey of the best online brokers.
2. Interactive Brokers
Interactive Brokers is on par with Fidelity in terms of its platform and access to international markets. “Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform, a large selection of tradable securities — including foreign stocks — and ridiculously low margin rates,” states NerdWallet. “Its new offering, IBKR Lite, offers commission-free trades of stocks and ETFs.”
Casery Research also lists Interactive Brokers as one of the top choices for international trading. The research firm calls the company “an industrial-strength online broker and one of the most popular among active traders and investors.”
In its review of the company, StockBrokers.com concurs: “Interactive Brokers provides the most diverse offering in the industry and leads by a wide margin in multiple areas, including international trading. Globally, customers can trade across more than 135 international markets in 33 countries.”
Interactive Brokers holds the top spot on Barron’s best online brokers list in a “dead heat” with Fidelity. Barron’s notes that Interactive Brokers “continues to offer the widest access to international markets.”
3. Charles Schwab
For the less experienced active trader, Charles Schwab is another of the top online brokers. It has a strong reputation for offering high-quality customer service, great investor education, affordable commissions and beginner-friendly web-based and mobile trading platforms.
“Schwab delivers for every type of investor, with $0 commissions, high-quality research and a robust investment selection — including a large selection of no-transaction-fee mutual funds with low or no minimums,” NerdWallet’s review states. The online broker offers two mobile apps with above-average capabilities: Schwab Mobile and StreetSmart Mobile.
Schwab’s Global Trading account allows clients to trade online on 12 foreign exchanges, including Canada and Australia, eight European exchanges, Japan and Hong Kong. The company offers a large selection of commission-free ETFs across various global markets in 30 countries. “Regular Schwab accounts can also trade on foreign exchanges, including the TSX,” notes Casey Research.
“As a full-service brokerage, Schwab has a fantastic, diverse offering of investments that will satisfy any investor,” explains StockBrokers.com. “Schwab trading platforms and tools are robust and will satisfy the majority of traders, making it a respectable choice for day trading and options trading.”
This is an updated version of an article first published by the Investing News Network in 2017.
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Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.