share trading

How to find the best online share trading platform

Information verified correct on December 9th, 2016

Research and compare share trading platforms to find one that offers the best features and price.

Investing in shares can be a great way to generate wealth and diversify your portfolio. Whether you’re saving for your retirement, or looking to increase your wealth, buying and selling shares on the stock market can help you realise your financial goals.

Of course, you’ll need in-depth knowledge of the share market and the right trading skills to have any success, plus you’ll also need to use the services of a share trading platform.

Rates last updated December 9th, 2016

Thanks to the rise of online share trading platforms in the past couple of decades, it’s now easier than ever before for Australians to buy and sell shares. Just like internet banking services have simplified the day-to-day hassle of managing your money, online share trading platforms make it quick and hassle-free to trade shares.

But finding the right share trading platform for you can be a tricky proposition. Not only can the stock market be confusing for beginners, but there are also plenty of trading platforms available to choose from.

In order to help make your decision as easy as possible, we’ve put together this handy guide to help you find the best share trading platform for your needs.

Get started trading shares

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Buying shares in a company effectively makes you a part-owner of that business, regardless of whether it’s a small IT startup firm or a global mining giant like BHP. The aim of the game when you invest in shares is to generate wealth, either through a rise in price of the shares your own, dividends a company pays to you (to give shareholders a portion of their profits), or through a combination of these options.

Once you’ve found a share trading platform and you’re ready to start investing, it’s actually quite easy to get started buying and selling shares; you can start your investment portfolio by purchasing as little as $500 worth of shares. However, ensuring that you make successful trades is where it can get more difficult.

It’s also worth pointing out that, just like any other investment, shares carry a degree of risk. There is the chance that you could lose the money you invest, so be sure to take steps to minimise your exposure to risk and ensure that you don’t end up in dire financial straits.

ALSO READ: 7 Steps to Buying Shares

How to find a share trading platform

findsharetradingplatforms

Instead of the traditional approach of using a stockbroker to manage investments, an increasing number of Australians are taking charge of their own funds and using share trading platforms.

For some it might be a simple choice of using your existing bank’s share trading platform. For example, Commonwealth Bank customers can open a CommSec account quite easily, while St.George customers can use the services of St George directshares.

However, just because your bank has a share trading platform doesn’t mean it’s the best platform for you, as others may offer a wide range of features that better suit your requirements. With this in mind, it’s a good idea to hunt around for other platforms to see what’s available.

All the information you need to find trading platforms and then compare the features they offer is online, both on the websites of those platforms and in blogs, forums and comparison articles on trusted websites like finder.com.au.

How to compare share trading platforms

Consider the following features when comparing the features of competing online share brokers:

    • Fees. This is one of the first features many people look at when comparing platforms. Every broker will charge you a fee for every buy or sell transaction, with the average fee around the $20 mark. Fees may change to a percentage of the transaction amount for larger trades. Some providers will also charge an ongoing annual or monthly fee on top of this, especially with the more feature-dense platforms.
    • What can you trade? Some trading platforms will give you access not only to Australian shares but also international shares, allowing you to trade large well known companies and share in their profits. Some platforms will also allow you to trade CFDs, forex, indices, currencies and much more, so be sure to factor this in too.
    • Ease of use. Share market trading can be a complicated business and often requires you to respond quickly to market changes. With this in mind, look for a platform that allows you to make fast and precise trades with minimum fuss. A misplaced trade can make a huge difference to your finances, so a simple and intuitive trading platform is critically important.
    • Your needs. If you’re just a casual investor, do you really need a share trading platform that offers a whole lot of complicated bells and whistles? Similarly, some platforms targeted at entry-level traders may not have all the features an experienced investor desires.
    • Access to market data. Your trading decisions will be partly based on what is happening in the market at any given time, so the information your platform provides about changes in share prices is of paramount importance. Does it deliver dynamic, real-time or delayed market updates?
    • Research. Successful traders are usually well-informed traders, so you may be able to benefit from the research and expert analysis offered by an online broker. Daily market reports, buy and sell recommendations and company financial reports and news can provide useful information to help you make informed trading decisions.
    • Trade methods. Can trades only be placed online or can you also buy and sell over the phone? How accessible is the broker’s trading platform?
    • Trade options. Consider the options available when you are buying or selling shares. Can you place orders at market and/or at limit, and are stop loss orders an option to add more flexibility to your trading? Trade options can help you to minimise your trading risk and protect you from significant losses.
    • Customer support. What support will be provided when you need help placing a trade? Look for online help centres, phone, email support and live online chat offered by the broker for their trading platform. Do they offer customer service 24/7? Do they have a panel of experienced investors that are available to help you? Do they offer general trading recommendations and strategies to help you reach your financial goals?

Find the right share trading platform for you

In order to decide on the best platform for you, you’ll need to consider your trading needs. Are you a casual trader, an active trader or an expert investor? This will heavily influence the features you are looking for in an online broker and their trading platform. From the ease of use of the system through to the market research information available, it is critical that the trading platform complements your trading needs.

Next, consider how often you intend to make trades. If you buy or sell shares once or twice a month (or even less) you’re a casual investor. The more you trade each month, the more likely you are to need a share trading platform that offers an extensive range of features and expert analysis.

It’s also a good idea to think about what you will be trading. While shares are the most commonly traded security, you can also trade in securities like managed funds or international shares through online brokers, so look for these financial instruments if you think you’ll need them.

The final factor you should take into account is the fees you will have to pay for the trading platform. As well as ongoing fees, consider the brokerage fees that apply to your transactions and whether they may be waived or reduced if you satisfy certain criteria.

Best Share Trading Platform

What fees will I pay for a share trading platform?

There are two fees that commonly apply when you use online share trading platforms:

  • Brokerage fees. Brokerage fees are those that apply to each buy and sell transaction, and they usually vary depending on the size of your buy or sell order.
  • Ongoing fees. These apply monthly or annually, but not all providers will charge ongoing fees.

Brokerage fees vary greatly between providers but typically start at around the $15 to $20 range. For large transactions, fees of 0.1% and up usually apply. If you’re planning on performing lots of trades, you’ll want to keep an eye out for a platform that offers low per-trade fees.

When it comes to monthly or other ongoing fees, some providers will not charge these fees at all. More advanced trading platforms will often charge a monthly fee which can rise up to around $80 per month. However, some brokers will waive this fee if you perform more than a certain number of trades each month.

Finally, remember that many brokers offer different membership levels - for example gold, silver, platinum - which offer different features and therefore attract varying fees depending on your preference.

What companies offer share trading platforms?

The table below contains a few details of some reputable share trading platforms in Australia. Keep in mind that some of these platforms are geared towards casual investors while others are designed for experienced investors.

PlatformBrokerage feeMonthly fee
CMC Markets Stockbroking - Classic Account$11 or 0.1%, whichever is greater (if you make 10 or less trades per month)$0
nabtrade Silver$14.95$0
nabtrade Platinum$14.95$9.95
Westpac Online Investing - Integrated Account$19.95$0
Bell Direct - Silver$15$0
CommSec - Share Trades Internet Preferred$19.95$0
HSBC - Silver$15.95$0
Macquarie Bank - Macquarie Prime$19.95$0
E*Trade - Standard$19.95$0
St George directshares - directshares Trading Account$19.95$0
Suncorp - Share Trade$21.95$0
Bell Direct - Gold$15$10

Benefits of using share trading platforms

  • Control your investments. Online brokers give you the ability to take charge of your finances and invest your money in a range of local and global financial instruments. Trading platforms allow you to become the part-owner of companies where you can receive a portion of the profit/loss of a particular company.
  • Convenient. You can trade shares and boost your investment balance all from the comfort of your own home. Trading shares online can require much less legwork than, for example, investing in property.
  • Affordable. The online share trading market sector is becoming increasingly competitive, which is great news for consumers because it means better features and lower fees. The cost of buying and selling shares online has dropped markedly over the past couple of decades.
  • Information at your fingertips. Many share trading platforms give you access to a wealth of market, financial and company information to help you make informed trading decisions. This gives you a much better chance of being a successful trader and meeting your trade objectives.

Risks of using share trading platforms

  • Lack of knowledge. The fact that you get to take full control of your investments can be a double-edged sword. While it allows you to take charge of your finances, it also means that you must rely on your own know-how to buy and sell shares. If you don’t know what you’re doing you can lose a significant amount of money.
  • Temptation to take risks. When you’re able to buy and sell shares in just a few quick clicks, it can sometimes be easy to forget that you’re dealing with real money and not just playing some sort of game. Remember, these are serious financial decisions you are making and all trading carries a degree of risk.
  • Error. A simple typo and a failure to proof-read any buy or sell orders before you place them could cost you a lot of money. Review your orders closely before you submit them.

How do I apply for a share trading platform?

Once you’ve found an online share trading platform you wish to use, it’s typically quick and easy to apply for an account. If the platform is run by your bank and you already have an internet banking account, there’s often very little you have to do except deposit funds into your share trading account and start placing orders.

If you’re signing up for an account with a new provider, however, you’ll generally need to provide the following details:

  • Your name, address and contact details
  • Your tax file number
  • Your driver’s licence number
  • Your linked bank account details

Once you’ve deposited funds into your account - a minimum deposit amount may apply - you are ready to start trading.

The most important questions about share trading you were too afraid to ask

What is the smallest trade I can do?

The minimum amount of shares you can purchase in a company is $500.

What is the difference between a market order and a limit order?

When you place a buy or sell order, you will need to select whether you want to place it ‘at market’ or ‘at limit’. Market orders will be executed at the best available price on the market at the time the order is lodged, while limit orders allow you to set a maximum (when buying) or minimum (when selling) price limit for your transaction. If your limit price is never reached on the market, your order will not be executed.

Can I test out share trading platforms before signing up?

Yes, some providers will allow you to open a demo account which allows you to trade dummy shares and get a feel for how the system works. This can be a great way to determine whether a certain platform is right for you.

What are dividends?

Many ASX companies will pay dividends to their shareholders twice a year. Dividends are your share of the company’s profits or earnings and are usually paid as a number of cents per share you own. However, it is not compulsory for companies to pay dividends from their earnings and they may choose to reinvest those earnings back into the company.

How do I make money from shares?

There are a couple of ways in which you can generate wealth through shares:

  • Through a rise in the price of the shares you own, allowing you to sell them for profit
  • Through a company’s profits and earnings which they pay out as dividends to shareholders

I’ve heard that I should diversify my share portfolio - what does that mean?

Diversifying your share portfolio basically means spreading your share purchases across a wide range of business and industries to minimise your risk. For example, if you only have shares in a few companies that all operate in the manufacturing sector, you could be risking significant losses if the manufacturing industry suffers a downturn. But if you purchase shares in businesses across a wide range of industries, this spreads your risk out across different market sectors and can help safeguard your money.

What are ‘blue chip’ companies?

Blue chip companies are large companies that regularly turn a profit. They are featured in the ASX Top 50 list and include companies like BHP and Telstra.

What are the share trading platforms of the ‘big four’ banks?

These are Commonwealth Bank’s CommSec, ANZ E*Trade, nabtrade and Westpac Online Investing.

What are some of the other advantages of trading shares?

When compared to the cost of investing in property, for example, shares are relatively cheap. They’re flexible, allowing you to buy and sell whenever it suits you and potentially make quick profits, plus they can be sold quickly and easily if you need quick access to funds. Finally, you don’t need a large amount of money to get started in shares, with the minimum trade limit set at $500.

Is it complicated to place a trade?

Not particularly. Buying or selling is simply a matter of indicating how many shares you wish to purchase or sell and specifying whether you want to place a market order or a limit order.

Do online brokers provide advice on which shares to buy?

Yes, depending on the share trading platform you choose and possibly on the level of membership you choose, you may very well be able to access expert stock recommendations.

How do I know what fees will apply?

Every online share trading platform will need to detail the fees that apply to members and transactions, both in terms of ongoing fees and brokerage fees per transaction. Read the fine print of your chosen platform to make sure you’re aware of all fees and charges that may apply to your trades.

Can I trade international shares?

Yes, some online share trading platforms will also allow you to trade international shares.

Can I open a joint account with my spouse?

You’ll have to check the terms and conditions of your chosen online broker, but in most cases it is no problem to establish a joint account and start trading.

Can I cancel or change an order after I have placed it?

Yes you can, as long as the order is still open and has not been executed. However, keep in mind that market orders are placed instantly, so this really only applies to at limit orders.

How can I become a better trader?

The best approach to improve your trading skills is to research, research and research. From trading strategies to financial news, company announcements and market activity, staying up to date with anything and everything related to your planned trades and the share market in general could help increase your levels of success. There are also plenty of courses you can take to learn the ins and outs of online trading. Make sure you only study with a trusted education or training organisation.

Where can I find out more about the Australian Stock Exchange?

The best place to go for information on the Australian Stock Exchange is asx.com.au.

Can I borrow money to buy shares? Yes, there are two main approaches to borrowing money to purchase shares:

  • Margin lending. This is offered by some banks and large stockbroking firms and involves using your existing, shares or managed funds as security.
  • Using the equity in your home to take out a loan for investment purposes.
  • Unsecured loans, although these will have high interest charges.

However, remember that there are many risks associated with borrowing money for an investment on which returns are far from guaranteed.

Share trading glossary

  • ASX: This is the abbreviation for the Australian Securities Exchange
  • All Ordinaries: This is an index of the performance of the share prices of around 500 of Australia’s biggest companies. Also referred to as the All Ords
  • Bear market: This term refers to when prices on the market are falling and further falls are expected to occur.
  • Blue chip stock: A blue chip stock is a large company with a steady history of turning a profit
  • Brokerage fee: This is the fee you must pay to a share trading platform when you use the platform to buy or sell shares
  • Bull market: This term applies when share market prices are rising and expected to continue to rise
  • CHESS (Clearing house electronic sub register system): This ASX system settles share trades and acts as the central registry for the electronic transfer of share ownership
  • Contract note: This confirms a buy or sell transaction and includes details such as the type of share, the price paid and the quantity traded
  • Dividend: Companies can distribute their profits or earnings to shareholders in the form of dividends. A dividend is calculated as a number of cents for each share you own
  • Float: The initial raising of capital through public subscription to a security
  • Fundamental analysis: This involves analysing the financial statements of a business to determine its overall financial standing.
  • Futures: Futures are contracts to buy or sell an asset at a specified future date
  • Limit order: A limit order specifies the maximum (when buying) or minimum (when selling) price you are willing to accept for a share transaction
  • Listed company: Listed companies have shares that are purchased and sold through the ASX
  • Live price: This is the price of a share at a precise moment in time
  • Market order: A market order is an order to buy or sell a share at its current market price
  • Short selling: This is when you borrow a security and subsequently sell it, with the obligation to buy it back in future at a much lower price
  • Volatility: This reflects the amount of fluctuation in share prices
  • Warrant: This gives its holder the right to purchase a security at within a certain timeframe and at a specific price
  • Yield: This is your return on an investment and is expressed as a percentage
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4 Responses to How to find the best online share trading platform

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    Lee | August 23, 2016

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      Cheers,
      Clarizza

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