Investopedia’s Online Broker Review Methodology

Unbiased, comprehensive reviews and ratings of online brokers

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Online Broker Review Methodology

Our mission has always been to help people make the best and most informed decisions they can about how, when, and where to invest.

Review Process

We designed a system that rates brokers based on 12 key categories and 103 variables. Each category encapsulates the critical elements users need to thoroughly evaluate an online broker.

To collect the data, we sent questionnaires with 320 queries to the participating brokers. We obtained a live brokerage account for each platform and used the account to perform hands-on tests for each broker. Many of the brokers we reviewed gave us in-person demonstrations of their platforms and services at our offices in New York.

From the questionnaires, the hands-on testing of the broker platforms, and the demonstrations, we score each evaluation category and combine the category scores into an overall rating for each broker.

Trading and Investing Personas

We believed our hands-on testing had to represent how real investors and traders truly use these platforms. We realized early on that one trader is quite different from the next. 

To solve this, we tested each broker on a series of investor personas. Our personas included the Passive Investor, the Active Investor, the Casual Trader, and the Day Trader. Each broker was put through four different trading and investing scenarios based on the different profiles we created. 

The Passive Investor

  • Someone who would like to invest for the long-term.
  • Goals include saving for retirement, leaving wealth behind for family, and dividend income.
  • This persona typically invests in large-cap/blue-chip stocks, ETFs, mutual funds, bonds, safe-haven assets, and has a generally more conservative strategy. Trading instruments and the range of assets available are not a primary concern. 
  • Someone who is not trying to be very hands-on and isn’t constantly watching the news, markets, or worrying about their investments.
  • Likely appreciates tools that help manage the portfolio—asset class summaries, portfolio-wide risk measures, rebalancing suggestions.

The Active Investor

  • Someone who is invested for the long-term, but is far more active with current market trends, news, and is always ready to reallocate their portfolio.
  • This persona will typically invest in stocks, ETFs, options, bonds, and is typically less conservative than the passive investor.
  • Someone who is hands-on, but also not watching their portfolio/s on a daily basis
  • Likely appreciates the ability to add non-traditional assets including foreign. stocks, currency holdings, and futures. This investor may be looking to do more advanced portfolio management, such as locking in gains or hedging positions.  
  • Will be looking for some more robust charting features to identify longer-term trends and may use platform-based fundamental and technical data streams and news to inform position levels.
  • Interested in in-depth market analysis on larger investment topics and seeks expert opinions to confirm trade decisions.

The Casual Trader

  • Someone who takes short-term trades when opportunities present themselves. 
  • This person typically trades stocks, options, ETFs, forex, commodities, and is looking for a platform capable of everything even though they may not use all of its features. Some may be looking for systematic trading capabilities. 
  • This trader is moderately aggressive and hands-on. Needs to be able to set up multi-leg trades and prefers to have the system automatically propose stops and losses on positions. 
  • Will appreciate robust charting features, including real-time chart pattern identification and trade suggestions. 
  • Looks for an active data feed of relevant news, fundamental and technical. Although most trade decisions are made independently, there is a desire to see confirmation from some of these sources during the life of the position.

The Day Trader

  • Someone who executes a large volume of short and long trades to capitalize on intraday market price action.
  • This person trades stocks, options, forex, and commodities and is looking for a platform capable of fast execution, low commissions, and possibly systematic trading. 
  • This persona is very aggressive and very hands-on. Some level of automation is a requirement for trade identification and formulation (stop levels, take profit levels informed by a key measure like MA for a defined time period) that can then be customized through trader input.
  • Expects all the charting tools and trade lab functions in a platform as well as a robust news feed and near real-time pricing data in a variety of markets.
  • Desires all these features in one platform, but is resigned to having to use multiple services that can layer on missing tools and customizations.
  • Comfortable with a learning curve in a platform and less interested in user-friendly products if it takes away from customized trading.

Testing the brokers on these four levels gave us significant insight into how these brokers would apply to different types of investors, ranging from the beginner all the way to the more advanced day trader. This allowed us to more accurately recommend brokerages to the right users.

Evaluation Categories

With the individual retail investor in mind, we took a critical look at the services and technology provided by online brokers. We organized our analysis into 12 categories, scoring each broker for its performance in each category.

Review Category Weighting Variables
Order Types 6% 13
Trading Experience 10% 8
Usability 16% 9
Range of Offerings 8% 12
Research Amenities 8% 10
Trading Technology 8% 7
Portfolio Analysis 8% 7
Customer Service 10% 6
Education 4% 7
Security 4% 3
Costs 8% 16
Account Amenities 10% 5

Each investor has different needs. New investors need an online broker with an easy to use platform and educational resources, whereas an options trader needs risk analysis tools and ways to model various strategies. In addition to our overall rankings, we provide rankings for ten trading and investing styles. In each case, we use the same data and re-weight the features that matter most for that style. The exact details of the re-weighting are provided on each of the category awards.

Order Types

The order types category is evaluated based on the types of orders customers can place using a brokerage platform. For this category, we looked for less common types of orders that can be useful for the inexperienced, up to advanced investors and traders. We also looked at whether these order types were available across mobile, web, and desktop software platforms. 

Higher scores in this section included the following order types across each of a broker’s platforms:

  • Stop Limit
  • Conditional Orders
  • Trailing Stop
  • Trailing Stop Limit
  • Market if Touched
  • Market on Close
  • Market on Open
  • Limit if Touched
  • Limit on Close
  • Limit on Open
  • Tax Lot Choice
  • Basket Trade
  • Prefilled Closing Order

Trade Experience

This category evaluates the overall workflow for placing an order. A primary emphasis in this category is a workflow that progresses logically from one step to the next. We checked out the ways a trader is told that an order is executed, such as pop-up notices, an order status update, and/or a text on a mobile device when the order fills. 

To score this section we documented our experience using the platform in ways they would be commonly used by different investor types. This category focused on the ways users can customize their experience throughout the various platforms that a broker offers. 

Top marks in this category require:

  • Overall workflow of desktop and web platforms
  • Overall workflow of mobile platforms
  • Customizability of trading experience
  • Functionality of chart trading
  • Real-time streamed quotes
  • Ability to stage and enter multi orders

Trading Technology

This category primarily evaluates what goes on after the trader submits an order and also addresses pre- and post-trade data.

We evaluated the quality of the data available during the order entry process with an emphasis on streaming real-time data. The availability of price-improvement strategies and smart-order routing technology (which finds the best bid or offer) is necessary to earn top ratings in this category. We asked whether a broker’s order routing engine used a spray or sequential engine; spray routing contacts multiple venues simultaneously and is less inclined to execute orders via routes that offer payment for order flow. Brokers offering price improvement—a sale above the bid price or a buy below the offer price—received a fraction of a point depending on the portion of their transactions that benefited.

Top marks in this category require that a broker offer:

  • The ability to backtest and create automated trading based on custom criteria
  • Order routing that emphasizes price improvement does not optimize for payment for order flow
  • Ability to customize the trading experience, such as setting a default number of shares or order types


While the trade experience evaluates the workflow process of trading and investing, this category specifically evaluates the overall site navigation and ease of use.

Top marks in this category require:

  • Simple navigation of the downloadable software, web platforms, and mobile apps
  • Variety of customizable features for the user to tailor the platform to their needs
  • Straightforward and simple account set-up process
  • Ubiquitous order ticket that is available throughout the platform 
  • All order types on the main platforms are also available on the mobile apps
  • Watchlists saved on mobile carry over to the other platforms and vice versa
  • Real-time streaming price quotes, research, and news for users to be up-to-date

Range of Offerings

This category evaluates the extent of asset classes a brokerage customer can trade online.

We awarded points for the diversity of investments that can be traded online, with partial points given for those that can only be traded by calling a live broker. Since long and short stock trading, as well as single-leg options orders, are now standard, we don’t award points for those transactions.

Top marks in this category require:

  • Large inventory of stocks that can be sold short, which is determined by the number of stocks on a broker’s easy-to-borrow list
  • The ability to trade complex options online
  • Number of no-transaction-fund mutual funds available, as well as the overall number of mutual funds offered
  • The ability to trade corporate and municipal bonds as well as treasuries, CDs, and international debt
  • Direct access to international markets
  • A robo-advisory that is integrated into the brokerage platform. A robo-advisory that requires a separate login receives fewer points.
  • Availability of cryptocurrency and the ability for the user to withdraw their crypto holdings to their own wallets

Research Amenities

This category evaluates the quality and accessibility of research, quotes, and charting.

We looked for research, news and charting linked to a customer’s portfolio and watch lists, quality of proprietary and third-party research and its integration with the rest of the site, and the quality of screeners.

Top marks in this category require:

  • Stock, ETF, option, mutual fund, and fixed income screeners that can be customized and reused that generate actionable results, such as adding to a watchlist or opening an order ticket
  • Trading idea generation features
  • Powerful and customizable charting
  • Real-time streaming news that can be filtered by asset wishlists, portfolio holdings, or by specific news outlets
  • Level II quotes
  • Analyst research
  • Premium research, both proprietary and third party. Points deducted for research that generates an additional fee
  • Useful tools and calculators

Portfolio Analysis

Top marks in this category require:

  • Clearly laid-out reports, updated in real-time, showing current balances, positions and margin status
  • Customizable portfolio-analysis reports with links to news and research
  • Entire transaction history 
  • The ability to beta-weight one’s portfolio or compare it to an index or customized indicator
  • Tax reporting also falls in this category. Full credit is given for reports that can be created on the broker’s website, with no additional fees or data entry required.
  • Partial credit is awarded to brokers that populate services such as GainsKeeper and Maxit (tax analysis and reporting programs) for an additional fee.
  • Trading Journals for users to note important information about their investments or trades
  • Internal rate of return calculators

Customer Service

This category evaluates the process a customer goes through when something goes wrong, or when a customer needs some additional hand-holding.

Top marks in this category require:

  • Online help is easy to find and use. Context-sensitive help earns additional points
  • Availability of live chat, user guides, and frequently-asked questions
  • Short wait times for help on the phone
  • The ability to visit a broker in person
  • System capacity to handle trading surges


This category evaluates the educational offerings that brokers have so that their clients can become more advanced.

Top marks in this category require:

  • Educational videos, webinars, and articles
  • Live educational events 
  • Information on life events that can have significant effects on financial situations such as inheritance or divorce
  • Glossaries of finance and brokerage terminology for traders and investors to better understand how they are interacting with the market


This category evaluates the bottom line for using a broker’s platforms and services.

This year we have updated our methodology to reflect what has become industry standard—Commission-free equity trading. This means that brokers who still charge a commission on equity trades fall behind. 

Full credit in this category can be earned by:

  • Zero commissions on equity trades
  • No per-leg fee for options trades 
  • Low cost for options contracts
  • Mutual fund transactions below $10 for funds not on a no-transaction-fee list
  • Margin interest rates below 7%
  • Low (or no) fees for mandatory corporate actions
  • No account maintenance, inactivity, account transfer, account closure, wire, check, reorganization, or software access fees

How Brokers Make Money for You and From You

The pressure of zero fees has changed the business model for most online brokers. In lieu of fees, the way brokers make money from you is less obvious—as are some of the subtle ways they make money for you. 

  • Interest on cash 
  • Payment for order flow
  • Stock loan programs 
  • Portfolio Margining


This category was gauged based on the broker’s security features and how the level of commitment the broker shows in keeping its client’s sensitive information secure. 

Full credit in this category can be earned by having the following features:

  • Two-factor authentication
  • Security measurement statistics by third-party evaluators
  • High password strength requirements
  • Sign-in via biometric identification (fingerprint, retina, face id) on mobile devices
  • Excess SIPC insurance

Account Amenities

Account amenities are evaluated by looking at the supplemental services that the brokerage offers other than standard trading and investing features.

High scores in this category include the following:

  • Portfolio margining for eligible customers
  • Stock loan programs that customers can opt in to
  • Interest rates paid on cash balances
  • Two-way cash sweeps into optimal money market funds
  • Automatic dividend reinvestment

How We Update the Data

Our online broker rankings are based on all the information available at the time we performed our reviews. We realize that online brokers make platform adjustments, product improvements, and pricing changes continually, and the data we included in our review may change from time to time. We are in constant contact with the online brokers in our rankings to stay on top of their changes so that we can update our reviews.


As we state throughout our online broker reviews, all investors are unique and have varying needs based on their goals. We believe that our comprehensive review process covers those needs as thoroughly as possible given the information available to us at the time. While there will always be outliers, we are confident that we have applied the most useful methodology to review and rank online brokers according to the most popular use cases among online traders and investors.

We thank you for your trust.