More and more Aussies are looking for the best online brokers.
The Australian Securities Exchange (ASX) trading platform has massively gained in terms of financial income. However Australian traders are also looking to invest in international shares and ETFs.
From share trading platforms and tools to funding methods, see below the best trading platforms in Australia.
Best Share Trading Platforms in Australia
- Pepperstone – Best Overall Trading Platform
- eToro – Best For Social Trading
- nabTrade – Best for AU Shares
- CommSec – Best for AU Options
- IG Group – Best for Forex Trading
- Interactive Brokers – Best for US Shares
- CMC Market – Best Support Team
- Bell Direct – Best for Day Trading
I love Pepperstone. They have everything you should be looking for in a CFD broker: the platform, the support team, the number of assets are all great.
The best part is that Pepperstone is actually based in Australia (Melbourne).
With Pepperstone, you enjoy the low spreads. This broker is FCA and ASIC Australia regulated. Across all accounts scalping and hedging is allowed.
The available leverage is up to 30:1, or even higher for pro traders.
eToro is the best trading platform for most people. It is the world’s leading social trading platforms with over 10 Million users. They offer real shares trading with zero-commission.
You can choose from over 2000 shares, from 17 exchange. A big drawback is that they do not offer any shares from the Australian ASX exchange yet. If you are interested in buying Australian shares, you should look for another broker.
If you are interested in international shares, then eToro is a fantastic choice.
nabTrade, offered by the National Australia Bank, provides over 10,000 exchanges across different instruments. Be it shares or bond, nabtrade has got you covered. The brokerage fee is at $19.95 for trades between $10,000 and $20,000. For trades at $5,000 nabtrade charges $14.95.
At this competitive price, nabtrade appeals to investors interested in both domestic and international trading. Through the company’s research and charting, spotting a good investment opportunity is simple.
Additionally, Nabtrade provides educational resources. If you are a beginner this is perfect as you get to learn about the market and investment strategies.
Like any other broker, they give you trading news and insights. You can easily access your portfolio through mobile, desktop or iress viewpoint.
The features and services offered make it difficult to look away from nabtrade if you are after a good trading platform
Commonwealth Securities is Australia’s largest platform when it comes to online stockbroking. It is run by the Commonwealth Bank of Australia. Headquartered in Sydney, the firm offers over 25 exchanges worldwide.
You can invest as little as $50 on Commsec Pocket. The brokerage fee is $10 for trades below $1,000. Commsec offers mobile trading and a research platform for stock recommendations.
With Commsec One, you’ll receive support, exclusive offers and priority access tailored for you.
Using margin loans, you can invest and take advantage of rising opportunities. Commsec afford you regular income through Fixed Income Securities.
CommSec is CMC Market’s closest competitor in the online trading platform.
5. IG Group
IG Group has grown to become one of the largest online trading brokers since its establishment in 1974. As of 2014, IG Group started providing stockbroking to retail traders. You can now, make both international and domestic trades on IG Markets.
This UK-based company is regulated by the Australian Securities and Investment Commission in Australia. With trading available for indices, forex, and shares, IG is one of the leading brokers that offers Contract for Difference (CFD) trading.
The brokerage fee is $8.00 or 0.1% per trade on Australian shares (the higher amount is used). IG additionally offers a demo account to traders who want to practice and get familiar with how the platform operates.
6. Interactive Brokers
Interactive Brokers LLC (based in Greenwich, Connecticut) is a brokerage firm that brokes funds, EFPs, stocks, options, bonds, and forex. It has offices in Sydney to cater for the Australian online trading market.
It’s a complex platform, hence not suited for first time traders and investors. For professional traders, however, it is the perfect platform. It provides low commission and spreads. Interactive Brokers offers diverse investment options (65 different order type).
The firm also provides resourceful tools and advanced technology through the Traders Workstation Platform. Despite being unideal, it gives a better comprehension of the online trading market to new investors.
7. CMC Market
The Currency Management Corporation Market is a hard to miss choice when you are after the best trading platform. At great prices, CMC Markets provide forex and contract for difference (CFDs) trading services. Next Generation is CMC’s forex trading platform.
Their classic brokerage fee stands at $11 or 0.1% for the first 10 trades not exceeding a value of $ 11,000. The active investor and premium trader brokerage fees are both $9.90.
CMC affords you margin trading and also the ability to trade over the web. The corporation offers over 300 currency pairs with tight spreads. This makes trading in Asia-Pacific currencies cheaper.
To beginners, CMC provides various charting options, client and research services. CMC has earned Canstar’s Broker of the Year award for the past 8 years.
8. Bell Direct
If you are looking to invest in domestic trades, Bell Direct is your platform. The brokerage fee is just $ 15 for the first 10 trades up to $10,000 with no monthly fee charged. Unlike other platforms backed by bankers, it is backed by brokers.
Bell Direct allows you to trade on all ASX listed securities with a one-second placement guarantee. They include ASX equities, warrants, managed funds (via mfund), exchange-traded funds (ETFs) and Initial Public Offerings (IPOs).
You get credible research resources & tools from Bell Potter as well as daily trading ideas. Additionally, you get free advanced conditional orders and interactive charting technology.
Bell Direct offers premium services such as platinum live streaming ($27.50 per month) and Integrated iress viewpoint ($79 per month).
How To Find the Best Trading Platform
Arriving at the best share trading platform depends on your particular demands. This is because there many good platforms each operating differently.
Therefore, it is only smart to understand what you are after and the online broker that can provide it best. Some of the key aspects to keep in mind are:
- Charges & Costs incurred: Some platforms have free brokerage. Most popular stockbrokers, however, charge a brokerage fee. You probably want the cheapest share trading platform which perfectly suits you.
- Market range: Some platforms don’t support international share trading. If you’re looking to trade in more than domestic stock, you need to find a platform that has international stock trading.
- User Interface: While platforms are designed for general usability, some are complex. They have features designed for expert traders. If you are a beginner, best go for one that you can easily use.
- Security: It is advisable to choose a platform that provides security and privacy to your funds or data. One that has the best security policy. After all, no one wants their trading data leaked or maliciously used.
- Customer Services accessibility: Keep in mind the reliability and efficiency of the platform’s customer support. It comes in handy when you encounter a problem or need to inquire about something.
The choice on which broker you prefer remains solely dependent on you.
What is Online Share Trading?
Before you can begin to engage in online trading, you first need a proper understanding of what online share trading actually is. Here is a breakdown of the concept…
The premise behind share trading is quite simple. A share of a stock is a small portion of a corporation. Thus, when people buy shares or stocks, they are investing in the future of a particular company. The price of a share can vary according to the performance of a company, investors’ attitudes, and economic conditions.
When you engage in online share trading, you are simply purchasing shares or stock across a digital medium. Here, an online broker takes the place of a human one. Also, for the most part, you make independent decisions about buying or selling stocks. Furthermore, you will often carry out these sales by yourself as well.
Here is how you can get your start with online share trading:
Find a Broker
Your first step to being a part of online share trading is to select a broker. Naturally, selecting one of the top brokers will make it far easier to place trades. At the same time, it is important to find one who caters to your budget and preferred trading requirements.
Choosing Your Stocks
Once you have found your broker, the next step involves selecting stocks to invest in. You should be aware that buying shares outright can be rather expensive. This is particularly true if you are planning on investing in a well-known, profitable company.
Thus, most newcomers find it easier to buy into Exchange-Traded Funds (ETFs). This gives investors the opportunity to invest in stock from numerous companies without having to incur as much of a cost. What’s more, many of these funds tend to be diversified as well, resulting in less risk.
Selecting Your Order Type
After choosing your preferred stock or ETF, you will need to pick an order type. The most common options include market orders and limit orders. With market orders, the order is executed instantly for the best available price at that moment. Limit orders won’t always execute the order right away, but does allow you to get a better price.
Calculating the Cost
Each type of trade has some kind of cost attached to it. For instance, when buying shares outright via a broker, you will often need to pay a commission for every trade. In case you are working with an ETF, then there is an expense ratio to be considered. All these costs will impact your overall investment percentage and profits.
Placing the Trade
Once you have done your research and determined your budget, it is time to place your first trade. Before you can do this, however, you will have to fund your brokerage account. After the funds have been accepted, you can pick your stock, order type, and then place the order.
Benefits of Trading Shares in Australia
Prior to becoming involved with share trading, you need to appreciate the advantages that await such a venture. So, here are some of the benefits involved with this form of trading:
Simple to Buy and Sell
It has always been easy to sell shares. However, now thanks to online share trading, this process is even easier than before. It is simply a matter of financing your trading account and then placing a trade as necessary. This means that much of the process is under your control.
At the same time, selling shares is just as easy. This is a good thing because it allows you to quickly take advantage of a turning tide. If you feel like your shares are going to lose value in the near future, this allows you to sell them off in an efficient manner.
Dual Earning Opportunities
What’s great about investing in stocks is that there are two different ways that you can make money. Now, the first one is a rather well-known one and is a method that is favored by day traders and buy-and-hold investors.
Here, you buy stocks when they aren’t worth as much. You typically do this with an up-and-coming company. Once the corporation has appreciated in value significantly, you can then sell your shares to make an immediate profit.
Your other option is for longer term investors, particularly ones who enjoy a steady income via their investments. Here, the investors purchase stocks in companies that pay dividends. These companies grow at a more moderate pace, but investors will receive payments at various points throughout the year.
Great for Long-Term Investment
If you don’t want to have to check on your investments too often, then share trading can offer you a wonderful advantage. All you need to do is invest in a company that performs moderately well. This way, you should be able to garner a tidy profit in the future. This will be despite the fact that there will be minor dips in the share value every now and then.
Allows You to Get Ahead of Inflation
Most investors are looking to invest in vehicles that allow them to stay ahead of inflation. And, this is something that share trading can do. Traditionally, stocks have averaged an annualization rate of around 10 percent.
When compared to the average annualized inflation rate, you will receive that shares perform better. Due to this, share trading lets you stay ahead of inflation as long as you engage in a more long-term investment strategy.
May Allow for Profit at All Times
There is no denying that it can be difficult to predict how an industry is going to perform at any given time. Economic situations, geopolitical troubles, and even the weather can wreak havoc with industries. As a result, selecting a continually profitable one can be tricky.
With share trading, though, you can diversify your portfolio. Therefore, you can invest in very different, even competing industries. Then, when one performs poorly, the other has a higher chance of doing well. In turn, you make a profit regardless of the market conditions.
Can Help to Gain Advantage Over a Growing Economy
If you ever feel like the economy is growing in your region, then share trading can be the perfect way to invest. This is because it benefits from an increase in consumer spending, particularly with newer sectors and companies. So, by investing in such companies, you will be increasing your own profits.
What is an ASIC License
You may have heard some trading platforms proclaim that they are licensed by ASIC. So, what does this actually mean to you? And, how does it have relevance to you as an investor?
Well, the ASIC stands for Australian Securities and Investments Commission. It acts as a regulator for Australia’s financial services and markets, ensuring a fair and transparent environment. Now, while ASIC does monitor trading platforms, it doesn’t license them.
Why Pick an ASIC Regulated Trading Platform?
ASIC will provide a license to the broker that is hosting the trading platform.
The regulatory agency will analyze and monitor the trading platform to ensure that it meets the necessary standards. It is only then that it will legitimize the associated broker.
Here is an idea of what ASIC requires brokers – and by extension trading platforms – to do:
A Minimum Operating Capital
ASIC requires the brokers associated with it to maintain a high minimum capital. This tends to be on par with other major regulatory agencies. The benefit here is that the brokers are then capable of sustaining high volatility and market events without going bankrupt. In turn, this ensures that the money that you have invested with the broker is safe.
Requires Local Representation
In many instances, ASIC will require the brokers to maintain an office within Australia. Now, while this may not appear necessary for an online service, it does serve a distinct advantage. It ensures that the broke is a legitimate entity and also increases accountability for its services, including its trading platform.
All regulated members have to be fully transparent about any financial dealings that they are involved with. Furthermore, the brokers that are associated with ASIC have to provide regular audit reports to prove that everything is above board.
Due to this, the agency has an accurate and up-to-date idea of how a broker is operating. Should they make any mistakes or attempt any kind of fraud, ASIC will award them with sanctions or penalize their services as necessary.
When you sign up with an ASIC regulated broker (and trading platform), you can rest easy knowing that your trades are going through on a legitimate platform. This can reduce the risk involved with such a financial process and almost entirely remove the chance of fraud.
There is also the fact that ASIC tends to only award well-functioning brokers and platforms with a license. And, this license requires these brokers to maintain a higher level of service. As such, signing up with such a service gives you the advantage of a much smoother and more efficient experience.
Top Online ASX Trading Brokers in Australia
With an average daily turnover of A$4.685 billion, ASX currently sits 12th in Major Stock Exchange groups. ASX has a market capitalization of A$ 1.9 trillion according to Wikipedia. With such figures, it is clear how large the stock trading arena is.
As a trader looking to dive into the stock market, it is best to consider your options regarding trading platforms.