Best Stock Brokers in the World for 2022

To rank the best brokers for buying and investing in stocks, we considered the following factors:

• The broker’s commissions
• The number of markets offered on the platform
• The investment flexibility offered
• The broker’s minimum deposit
• The overall quality of the broker

Round-up

1. DEGIRO: best broker for european stock traders
2. eToro: best for investing in stocks in a flexible way
3. IG Markets: best for trading CFD stocks
4. XTB: best investment platform
5. Trading 212: best for trade fractional stocks
6. FP Markets: best for investing in Australian stocks
7. Saxo Bank: professional trading environment
8. Fineco: best for high-volume stock investors
9. Interactive Brokers: best for professional investors
10. TradeStation: best for stock options trading

WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investor accounts lose money when trading CFDs.
You should consider whether you can afford to take the high risk of losing your money

Review

1. DEGIRO

• At DEGIRO you can trade stocks on over 50 stock exchanges around the world.
• The wide choice of stocks is accompanied by very low commissions starting at €0.50 for US stocks.
• On DEGIRO you cannot purchase fractional shares.
• DEGIRO does not offer a trial period but allows its users to open accounts starting at €0.01.
• DEGIRO’s trading platform is available from both browser and app.
• Trading stocks listed with currencies other than the Euro will result in a small additional fee for currency conversion.

2. eToro

• eToro is a broker that offers a very flexible platform for investing in stocks
• Through eToro you can invest in fractional stocks (real and CFD) from as little as $10.
• eToro’s platform also allows you to trade baskets of stocks called “Smart Portfolios” which will allow you to invest semi-automatically.
• You can buy stocks either with eToro’s webtrader platform or from the app.
• eToro offers a great free unlimited demo account, while a real account requires a $50 minimum deposit.

3. IG Markets

• At IG Markets you can trade a total of more than 16,000 stocks.
• IG Markets does not offer real stocks, only derivatives (CFDs)
• LLeverage on stocks of up to 1:5.
• IG Markets allows you to trade stocks on its proprietary platform andthe app.
• A real account on IG can be opened from €300. A demo account is also offered.

4. XTB

• XTB allows you to trade over 5400 stocks on its platform.
• Stocks on XTB charge a 0.2% commission for every €10 of volume.
• XTB does not charge any commission on stocks if you trade less than €100,000 monthly.
• In addition, XTB allows its users to create EU and US stock market orders from $10
• A free XTB demo account is offered.

5. Trading 212

• With Trading 212 you can invest in over 7000 stocks.
• Trading 212 presents the Autoinvest feature, which allows you to create customized portfolios to manage according to your goals.
• At Trading 212 you can choose to invest in CFDs (with the Trading 212 CFD account) or in real stocks (Trading 212 Invest).
• Trading 212 also makes fractional stocks available starting at $1.
• Opening an account requires a minimum deposit of $1 for the Invest account, and $10 for the CFD account. Alternatively, you can try both with a demo account.

6. FP Markets

• At FP Markets you can trade online on a multitude of markets including over 4000 instruments in total.
• FP Markets offers online trading at very low commissions as low as 0 pips, with lightning-fast order execution.
• With FP Markets you can trade stocks on MetaTrader, but also on the IRESS platform.
• FP Markets requires a minimum deposit of $100 to get started, but there is also a free trial account.

7. Saxo Bank

• Saxo Bank is great for trading stocks with high volumes
• With Saxo Bank, you can trade over 22,000 stocks on over 50 world stock exchanges.
• Commissions are high and start at $18, however they can be lowered to as low as $2.50 if you make more than 1,000 trades per month.
• The trading environment is highly professional, with detailed stock market analysis
• Saxo Bank allows traders to choose between the Investor and TraderGO platforms depending on their needs. Both are available as a webtrader and as an app.

8. Fineco

• On Fineco areable to trade over 1200 stocks in total on European (including Italy), Canadian and American stock exchanges.
• Stocks on Fineco can be traded either as real or CFDs.
• Commissions on Fineco are fixed and start at €19 per transaction, however, they can be reduced to €2.95 per order (or €3.95 for US stocks) depending on the volumes generated by the account.
• Commissions on CFDsare not fixed, but are represented by the spread and vary depending on the state of the market
• Fineco’s trading platform is available not only on mobile, but also from webtrader.
• Opening an account with Fineco requires a minimum deposit of €100, and there is no trial account.

9. Interactive Brokers

• At Interactive Brokers you can trade over 17000 stocks at very low commissions.
• Commissions on IB start at $0.35 for trading US stocks.
• IB’s IBKR platform lends itself not only to classic stock trading, but allows more advanced traders to create EAs and automate investments.
• IB is suitable for professionals as well as beginners because of the ability to trade fractional shares from as low as $25
• A demo account on IB is available to try the service, but a minimum of €2000 is required to open a real account.

10. TradeStation

• A large number of stocks can be traded with TradeStation without commissions.
• TradeStation users can buy stocks, invest in options on stocks, and use margin up to 3.5 percent
• TradeStation offers a stock lending program, where traders can lend shares to earn daily interest
• Stock prices shown on the TradeStation platform are in real-time
• A minimum of $1000 is required to open an account on Tradestation.

Investing in a whole stock vs fractional stock

The main differences between investing in whole shares and fractional shares are the amount of money needed to make the purchase and the flexibility in managing the portfolio even with little money.

A fractional share is, as the name suggests, a portion of a whole share. Today, some stock brokers allow one to buy small slices of shares that would normally require hundreds if not thousands of USD to buy.

This is also reflected in the benefits that that shares could provide, such as dividends. These too will be proportionate to the fraction of the share purchased.

Flexibility, on the other hand, is the other plus point, especially for those who want to invest small amounts. Professionals try to balance their portfolio by buying different stocks in different markets.

A well-balanced portfolio is in fact one of the keys to limiting the volatility of one’s investments, but tens of thousands of USD are often required to have a balanced portfolio.

Fractional stocks, on the other hand, allow you to invest in expensive stocks for cheap, which makes it possible to expose your portfolio to many companies and markets with more flexibility. By purchasing a fractional share, dividends, if any, will also be fractional.

Below you can find an example of investing in a $100 share that offers an annual dividend of $1.

What to buy: real shares or CFD shares?

For long-term investing, real shares are always the best choice, whereas if you want to speculate on the short term, CFD shares are the most suitable derivative.

CFDs lend themselves well to short-term trading because they involve the use of leverage, and above all, one can open both long and short positions depending on the direction of the market.

The main problem with CFDs, however, is the presence of swap commissions. Swap commissions are interest of a few cents that the broker charges each day at the close of the market if you leave your trading position open.

This means that over the long term, a CFD stock will accumulate a large number of small daily commissions that over time will erode potential gains or compound losses.

Real shares, on the other hand, as well as fractional shares, do not charge overnight commissions and can therefore be held over the long term without worrying about management costs.

In the following example you will find the costs of buying and managing an Apple share on eToro (140 USD).

What happens when you buy stocks on a broker

When purchasing a share, the broker acts as an intermediary with the stock exchange to fulfil the client’s order. Typically, the shares purchased are not actually owned by the client, but are held in the client’s name in omnibus accounts.

Omnibus accounts are segregated accounts owned by the broker in which the broker deposits the shares and/or financial instruments purchased by all clients.

Although the shares are in fact owned by the broker, the broker labels each share in the omnibus account so that they are kept in the name of the client who made the purchase.

Why do many brokers use omnibus accounts?

Brokers use omnibus accounts to cut costs and offer more competitive commissions. They also allow them to offer a range of additional services such as fractional shares.

What happens is that, for example, if a share is worth $100, the broker would not be able to buy only part of it if it were to be owned by the customer.

However, if 4 clients place a $25 purchase order on a share that is worth $100, the broker can buy it and keep the whole share in his omnibus account, thus allocating 25% of the share to each of these clients.

The result is that the share is de facto owned by the broker, but the broker internally allocates it to the clients who have requested it.

Useful resources for investing in shares

Stock brokers generally offer a good number of additional services for investors.

These include economic calendars to monitor economic decisions that could shake up the markets.

Other calendars that can be found on brokers like eToro are dividend and earnings calendars, which help to monitor when a company will distribute its next dividend, and when a company will publish its financial status report, respectively.

However, very often brokers lack advanced tools to monitor the markets, or their platform makes it complex or unintuitive to monitor the stocks of interest.

There are several services for this purpose, including:

Finviz: a site that allows one to filter stocks via its ‘screener’ function. The user can apply over 60 different filters based on descriptive characteristics, fundamental analysis, and technical analysis of the stock.

Morningstar: is one of the main hubs for monitoring the stock market at a fundamental level. Morningstar’s database makes it possible to monitor, compare and verify the financial status of thousands of companies. With a subscription, you can also get stock-specific information and analysis (such as Fair Value calculations) from Morningstar analysts.

Yahoo Finance: Here you can find news, market overviews, and even specific information on stocks you are interested in.