Smartphones are making life easier these days. With a smartphone, you can have access to virtually all major brokerage firms, through some stock trading apps, making the process of buying and selling a lot easier.
In this guide, we’ll share some of the best stock trading apps from some of the best stockbrokers as well as some things to consider when deciding which is the best choice for you.
What Is a Stock?
A stock is a financial instrument that represents ownership in a company or corporation and represents a proportionate claim on its assets (what it owns) and earnings (what it generates in profits).
Stocks are also called shares or a company’s equity.
Stock ownership implies that the shareholder owns a slice of the company equal to the number of shares held as a proportion of the company’s total outstanding shares.
For instance, an individual or entity that owns 100,000 shares of a company with one million outstanding shares would have a 10% ownership stake in it.
Most companies have outstanding shares that run into the millions or billions.
What is the ‘Stock Market’?
Also known as the equities market, a stock market is a place where shares of publicly owned companies can be bought and sold.
Publicly traded shares can be traded either through centralized exchanges or OTC (over-the-counter).
The stock market is essentially a free economy market where companies can access capital by offering part ownership to interested investors who are basically outsiders.
This is beneficial for both investors and the underlying companies.
For investors, the stock market offers a unique opportunity to be part of an established or already running business and to reap any of their resulting rewards without the high risk of investing in a new, unproven business.
For the underlying companies, the stock market allows them to access a convenient source of capital to fund their growth or expansion activities. This creates a win-win situation for both parties.
Check Out The Risks in Stock Market
Stock Market Basics
Stock markets facilitate the sale and purchase of these stocks between individual investors, institutional investors, and companies. The vast majority of stock trades take place between investors.
That means, for example, that if you want to buy shares of Microsoft (NASDAQ:MSFT) and hit the “buy” button through your broker’s website, you are buying shares that another investor has decided to sell — not from Microsoft itself.
By purchasing shares of a stock, you become an investor in the underlying company.
How is the Stock Market Broken Down?
There are various segments of the stock market to consider when entering into a purchase or interest in the shares of a particular public company. The stock market is divided into the primary market and the secondary market.
1. Primary Market
The primary market is when new securities are created or issued, and they then become available for trading by individuals and institutions.
Here, securities are directly issued by the company that seeks to raise capital to fund its long-term goals and ambitions.
The most common way companies interact in the primary market is through an IPO (Initial Public Offering) where stocks are listed for the first time to trade in the market.
2. Secondary Market
After the initial offering in the primary market, all subsequent trading of securities takes place in the secondary market between investors, with the underlying company not involved.
Trades are facilitated by stock exchanges or by brokers who act as intermediaries.
3. OTC Market
Also known as trading off-exchange, trading OTC (over-the-counter) is an option for investors to buy and sell stocks in a decentralized market.
Trades are conducted between two parties via a dealer network, with a centralized exchange not involved.
Read Also: How to Invest in the Stock Market For Beginners
Best stock trading Apps for 2022
1. Best overall: Charles Schwab
Charles Schwab‘s Schwab Mobile is a strong all-around choice for stock traders. It comes with no account minimums and no recurring fees.
You can choose between just about any type of investment account you would want and most types of investments.
And for stock trades, the app is well-rounded for both beginners and experts. Schwab also offers a no-fee automated adviser, Schwab Intelligent Portfolios.
The mobile app makes it easy to view your accounts, positions, and balances. You can view market indices and news, research stocks, and enter an array of trade types from the app.
2. Best for Active Traders: Thinkorswim
TD Ameritrade‘s thinkorswim is a top stock trading app for active traders. TD Ameritrade features accounts with no recurring fees and no minimum balance.
It offers a diverse range of accounts and investments, including some investments that are less commonly supported such as futures, forex, and cryptocurrencies.
But it stands out for its active trader offering for both experts and those looking to become experts in active trading.
3. Best for Beginners: SoFi
SoFi Invest is one of the best stock market brokerages for new traders. SoFi’s app is less robust than some larger competitors, but that also makes it easy to navigate and understand if you don’t have as much experience in the markets.
SoFi offers taxable accounts, retirement accounts, and a more limited set of investment choices. But stocks and ETFs are well represented.
SoFi also offers a no-fee automated investing platform, and it lets you invest in fractional shares through a product it calls Stock Bits.
The stock trading section of the SoFi app offers basic fundamental information and recent price charts for supported investments.
4. Best for no Commissions: Vanguard
Vanguard has investment options for just about every type of investor. In addition to its Jack Bogle-created index funds, the brokerage offers commission-free trading on several investments.
Also, automated investing (with the choice of one-on-one advisor guidance, thanks to Vanguard Personal Advisor Services), IRAs and other retirement resources, and market research and educational resources.
In addition to its iOS and Android mobile apps, Vanguard also offers trusts, 529 plans, custodial accounts, small business retirement plans, and more.
5. Best for Long-term Investing: Fidelity
Fidelity offers a wide range of accounts and investments that could meet the needs of virtually any investor.
It stands out as a great choice for stock market inventors looking to buy and hold for long-term goals like retirement. It offers a wide range of investing products, including fractional shares.
In addition to common tools that allow you to research and trade stocks, Fidelity offers apps and tools to help you reach retirement goals and other long-term plans.
How do Beginners Trade Stocks?
Here are common steps for beginners when learning how to buy stocks online:
Account setup: Open a self-directed brokerage account.
Navigate platform: Learn how the trading software works (website, mobile app, or desktop).
Budget: Decide on a monthly amount you can afford to risk.
Strategize: Develop an investing style, such as buy and hold or short-term trading.
Manage risk and reward: Incorporate rules using order types (stop and limit orders).
Set goals: Focus on percentage returns and decide on your time horizon.
Note that investment selection varies from one trading app to another and should certainly be a factor when deciding which to use.
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