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10 Biggest Online Brokers in 2021

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Ty Haqqi
·9 min read
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In this article we are going to list the 10 biggest online brokers in 2021. Click to skip ahead and jump to the 5 biggest online brokers in 2021.

It has never been more important to save money and invest them appropriately than it is now. The Covid-19 pandemic has devastated the entire global economy at levels not seen in the past century or so, and with the ensuing lockdown to limit the spread of the virus, lockdowns had to be imposed which led to millions of jobs being lost across the globe. This of course meant, and still means, that many people do not even know where their next paycheck is coming from.

And while fate has dealt a horrible hand to most people, the few that do have enough for savings and investments have fared somewhat better as they know that they at least don't have to worry about the immediate future even if their job is at risk. And one of the most popular forms of investing money right now is investing in the stock market, which has traditionally been the domain of the rich. Ever since companies started to be traded in the stock exchange, capitalists, hedge funds and high net worth individuals have made it their playground, making more and more through buying and selling shares, and using complex terms and coming up with complex methodologies that made the market unattractive for even the average finance professional, let alone those who are not in the industry. And while the rich are easily able to make huge trades and engage in complex financial arrangements, the not so rich are shut out due to the fact that they have to pay high commissions, high margins and even then are not allowed to engage in some of the most complex financial arrangements.

This is where online brokers come in. A broker is a person or an institute which acts as an intermediary between the buyer and seller of a financial instrument, in this case shares of a company. The broker executes the deal on behalf of the purchases and facilitates the purchase while charging a small fee / commission. With the rapid advancements of technology, in recent years online brokers have emerged and gained huge popularity especially in the United States, inviting people who are now known as retail investors. Now, you don't need high minimum amounts, and most online brokers actually don't require any minimum amounts at all. Many of these brokers also don't charge commissions on any transaction, and even offer margin purchases. Margin purchases refer to purchases made by borrowing money from a broker, allowing people to invest more money than they actually have. This is of course a risky move which could backfire if you lose the money and are now on the hook for money that you don't have, which is why I personally have always avoided making this type of investment, or any investment other than that amde from money which I actually have. And this development has led to one of the most controversial and major incidents in recent stock history.

stocks, analysis, market, numbers, business, ticker, trade, money, price, investment, index, chart
stocks, analysis, market, numbers, business, ticker, trade, money, price, investment, index, chart

bluebay/Shutterstock.com

Unless you're living under a rock, you must have heard about the GameStop (NYSE:GME) price rise over the past couple of weeks. This was done to gain revenge over the hedge funds which had shorted 140% of the stock. The typical method of investing and making money from stocks is investing in a company which you think has potential to do better, or which you think is undervalued, wait for the share price to go up and then sell it and pocket the gain. A short takes this entire system and turns it on its head. When you short a stock, you are actually betting on the company to fail. So for example, you find a company which you think is failing and whose stock will fall in the future. When you short the stock, that means you actually sell it at the price it is right now (in this example for $100), even though you don't actually own the stock. Then, you enter a contract to buy it at a later date, by which time you think that the stock will have fallen to say $50 and you'll have netted a $50 gain. This is what major hedge funds had done with GameStop, a struggling company which was struggling even more during the pandemic. Then, Reddit got involved and the sub-reddit WallStreetBets started buying up shares of GameStop and as the message gained popularity, more and more people started buying the stock, raising its price massively. This has not just been restricted to GameStop though, with other companies such as BlackBerry (NYSE:BB) and (NYSE:AMC) also being impacted, though not as severely.

And this in fact, is the biggest risk when you short a stock, cause the losses are theoretically infinite. It is said, according to S3 Partners, that the hedge funds shorting the position, have actually lost around $20 billion in this amazing, incredible story where the retail investors have actually gained approval of both the Democrats as well as the Republicans in addition to many famous personalities across the world such as Mark Cuban among many others. So why exactly did Reddit do this? To punish Wall Street and punish the hedge funds which had shorted more stock than that in existence, and to dissuade the policy of shorting stocks, which as I mentioned is betting on the company to fail. How this will turn out, only time will tell but it does seem that there will be a lot of eyes on the stock market when this finally does come to a conclusion. But for now, the person who started this entire thing, making an investment of over $50,000 in 2019, has now unrealized gains of more than $43 million, which is simply astonishing, while also making several other people multi millionaires as well. This also reminds me of another failure in shorting a stock, when investors who had shorted Tesla in 2020 ended up losing more than the entire hospitality industry did from the pandemic, as Tesla shares shot up massively, even briefly making Elon Musk the richest person in the world ahead of Jeff Bezos. These investors ended up losing more than $38 billion in just 2020as shares rose more than 700%.

Another important question is how Redditors and retail investors were able to make such a serious and significant impact on the stock. This was mainly due to the online broker apps available which have extremely low / non-existent customer fees or commissions, as well as the easy to use interface. These apps had already started to grow in influence and demand when the pandemic hit and people were forced to stay home. Many people, who had time on their hands and were lucky enough to have savings which they could invest, started using these apps to make investments and one of the apps has been the main one used in this entire saga, which went from being beloved to being incredibly hated and now has class action suits filed against it when it refused to allow its users to purchase GameStop stocks, and only allowed them to close out their positions. After strong backlash, the company resumed allowing purchase of these stocks but greatly limiting such purchases, with users claiming they were unable to purchase more than a single share. This app of course, is Robinhood, and has come under fire by not just normal users, but by Democrats and Republicans as well, including Alexandria Ocasio-Cortez and Tred Cruz agreeing on something after a long, long time. While Robinhood is still among the biggest online brokers in 2021, whether it will stay on the list a year from now is a big question, considering the controversy the app is currently embroiled in. The company has also been planning an IPO, which will be quite interesting to see as well.

Of course, there are a lot more online brokers out there now, and considering the rise in demand, there is a possibility that even more will emerge and create more competition in what is a relatively new industry. Actually, the fact that there were substitutes available has allowed people to continue buying GameStop stock even as Robinhood keeps on applying restrictions and seemingly digging itself into an even bigger hole. And that is what we're going to focus on today. Since most online brokers, including the biggest online brokers in 2021, are private, there is little data available regarding their finances, earnings and profits. This is why instead of using those metrics, we have ranked the biggest online brokers in the world by how little commission they charge. So without further ado, let's take a look at the online brokers making it easier for us to invest and earn, or lose, even more money, starting with number 10:

10. Zacks Trade

Zacks Trade executes stock trades, options and ETFs charging just $1 per order, or 1 cent per share. It is also the only option in our list which requires an account minimum, which is $2,500.

stocks, analysis, market, numbers, business, ticker, trade, money, price, investment, index, chart
stocks, analysis, market, numbers, business, ticker, trade, money, price, investment, index, chart

crystal51/Shutterstock.com

9. Tastyworks

If you want to trade in options, then Tastyworks is among the best online brokers in 2021, with no commissions or minimum account requirements.

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stock, trading, market, trader, traders, investor, investment, screen, bank, banking, share, broker, graph, business, chart, index, data, information, capital, team, money,

Matej Kastelic/Shutterstock.com

8. Charles Schwab (NYSE:SCHW)

The financial services company is one of the biggest banking institution in the United States and it also offers a high quality online trading platform, whose customer service is said to exceed its competition.

Jonathan Weiss/Shutterstock.com

7. TD Ameritrade

The corporation that is responsible for the online trading platform is 50 years old, and has revenues of over $5 billion annually. The online broker also offers helpful tips and education to its many users, which is why many websites including Forbes have declared it as the best online broker for beginners.

stock, exchange, trade, ipo, market, london, share, rate, sales, price, new, york, profit, index, broker, chart, rising, falling, street, frankfurt, wall, world, cash, points, display,
stock, exchange, trade, ipo, market, london, share, rate, sales, price, new, york, profit, index, broker, chart, rising, falling, street, frankfurt, wall, world, cash, points, display,

lassedesignen/Shutterstock.com

6. TradeStation

TradeStation is an international company with offices in Australia and the United Kingdom in addition to multiple offices in the US. The online app operated by the company even provides a cash credit of up to $5,000 if there's a qualifying deposit.

Please continue to see the 5 biggest online brokers in 2021. Suggested articles:

Disclosure: No position. 10 biggest online brokers in 2021 in the world is originally published at Insider Monkey.