In this Fidelity review we are going to look at all the different aspects of using this broker to trade as well as how to open an account with them.
Fidelity was rated the Best Online Broker in 2018 by Investor's Business Daily and StockBrokers.com. In fact, they were also named Best Online Broker in 2016 and 2017 by Barron's, Kiplinger's, and Investor's Business Daily. Keep reading to see if this is the right broker for you!
Founded in 1946, Fidelity Investments is well-known throughout the industry and offers a wide range financial services.
The broker is part of the “big five” brokerage firms; operating as a discount brokerage firm. With over $19 million in retail brokerage accounts and $2 trillion in client assets, clients should expect a lot from Fidelity and they deliver.
It costs nothing to open a Fidelity account. However, if you want to trade on margin, a deposit of $5000 is required. Luckily once this amount has been met, Fidelity doesn’t require you to maintain a minimum account balance or charge you annual fees.
Fidelity has lowered its fees and they are some of the best among all brokers! All US stock trades are now a flat $4.95, options trades are $4.95 plus $0.65 per contract.
By opening an account you have access to over 265 commission-free ETF's. If you have been shopping around you'll see this is in line with the big players such as E*TRADE and TD Ameritrade.
Also, Fidelity is the only brokerage to provide their clients with a raw tally of savings due to quality order execution. See the table below for a detailed breakdown of fees:
Named one of the best brokers for fund research and tools, it’s no surprise this is where Fidelity shines.
For example, let's take a look at this AAPL quote. You're given many helpful nuggets of information. From key financial metrics, recent news to ratings, Fidelity offers a comprehensive research experience.
The online trading platform is laid out like a standard website. As a result, if you're new to the platform or even trading, you will find it quite intuitive.
Any basic investing function such as quotes/price charts, news, analyst reports, etc. are easily accessible on Fidelity’s web platform.
However it is a static website. As a result you can't customize the platform (i.e. adding and removing windows). However, you do have the option of creating multiple watch lists that can be sorted by price or volume as well as set alerts.
This is where things get exciting! Fidelity's Active Trader Pro for desktop is their premium trading platform. The easy-to-use platform is clean and offers a plethora of features coupled with powerful research resources.
It’s no Thinkorswim. Although it gives it a run for its money with its great features, including intuitive shortcuts and fantastic charting. In fact, it even has a multi-trade ticket that can store orders for later and place up to 50 at a time.
Additionally, it has over 60 interactive and customizable charts, 22 different drawing tools and 166 optional studies. As a result, it’s a traders dream. However, unlike competitors TD Ameritrade and Charles Schwab, Fidelity does not make its active trader platforms automatically available to all customers.
To qualify for Active Trader Pro, 36 or more qualified trades must be made in a rolling 12-month period. You can also phone in to request access.
If you want to make trades on the go, there are mobile apps for the iPhone, iPad, Android and Windows Phone. It’s simple, easy to navigate and user friendly.
It's easy to perform research, set up notifications, browse news-feeds and order trades from your smartphone. However, a downside of the mobile app is the complex charting and research Fidelity is famous for is virtually nonexistent.
Thus investors may be disappointed if they are looking for complexity within the mobile device. Furthermore, the inability to make rapid-fire trades is detrimental to momentum traders.
We can’t stress the importance of risk management here at Bullish Bears. What sets apart the new trader from the seasoned pro is their ability to manage risk.
The patented Trade Armor tool was developed by Fidelity for the sole purpose of managing risk. It works by helping investors visually see their strategies in the Active Trader Pro platform. As a result, they are able to quickly and easily identify stock entry and exit points.
See the image below for a quick look at the tool:
Active Trader Pro’s functionality list is robust to the point where it trails only behind the two undisputed leaders in this arena: TD Ameritrade's Thinkorswim and E*TRADE. Their advanced platforms, deeper settings and ability to custom code studies causes them slightly outshine Fidelity.
However, Fidelity's platform is still strong. With low commissions and an easy-to-use platform, they offer a solid experience for beginners as well as advanced investors.
The vast amount of research provided is a huge benefit. While day traders may not get the same benefit from this type of research, it can be very beneficial for investors!
Are you still uncertain as to which broker to choose or new to trading all together? Check out our video on How to Open a Brokerage Account as well as our vast array of courses and videos for beginners to help guide you in your trading journey!
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