Share trading platforms

Online share trading platforms have made trading and investing in shares more accessible and made broking accounts and transactions less expensive. Discover the ins and outs of share trading to find out if it’s something you’d like to try.

By   |   Verified by David Boyd   |   Updated 14th June 2021

Comparing share trading platforms

Stake

On Stake's website

Featured

Stake

Brokerage Fee

$0.00

Tradable Assets

Shares, ETFs

Tradable Indices

NYSE, Nasdaq

Signup Bonus

Get a free share by using the referral code davidb986

Highlights

  • Make trades in seconds on over 3,800 US Stocks and ETFs.
  • Clear, simple and better pricing with no hidden fees.
  • Securities insured up to $500k.
eToro

On eToro's website

Brokerage Fee

$0.00

Tradable Assets

Shares, FOREX, Cryptocurrencies, Commodities, ETFs

Tradable Indices

NYSE, Nasdaq

Signup Bonus

N/A

Highlights

  • Trade and invest in top financial instruments, including a wide selection of stocks.
  • eToro is regulated by CySec, FCA, ASIC and FSAS.
  • Your funds are protected by industry-leading security protocols.
Pearler

On Pearler's website

Pearler

Brokerage Fee

$9.50

Tradable Assets

Shares, ETFs

Tradable Indices

ASX

Signup Bonus

N/A

Highlights

  • Enjoy low, transparent fees.
  • An option to Autoinvest. Set-and-forget your investment strategy.
  • Simply invest into any ETF from one of Pearler's ETF managers for at least one year, and it's free.
  • Clearing House Electronic Sub-register System (CHESS) sponsored.
Superhero

Brokerage Fee

$5.00

Tradable Assets

Shares, ETFs

Tradable Indices

ASX

Signup Bonus

N/A

Highlights

  • Open and account with just $100 and start investing today with $5 flat fee brokerage on share trades.
  • Fund your account in minutes. Your Superhero Wallet allows you more flexibility with your cash.
  • Invest in your favourite shares and ETFs quickly and easily from your smartphone or desktop.
SelfWealth

Brokerage Fee

$9.50

Tradable Assets

Shares, ETFs

Tradable Indices

ASX, NYSE, Nasdaq

Signup Bonus

N/A

Highlights

  • Open an individual, company, trust, SMSFs or joint account for free.
  • Provides commission-free trading – you'll never pay more than $9.50 brokerage and there are no account fees.
  • Trade with confidence with free trading tools, including market depth and live pricing.
CommSec

Brokerage Fee

$10.00

Tradable Assets

Shares, Margin Loan, Options, ETFs, Warrants, Fixed Income Securities

Tradable Indices

Top 25 exchanges around the world - US, UK, AU and more.

Signup Bonus

N/A

Highlights

  • Join now and enjoy no monthly account fees. Simply select the account that suits you best and you could be trading with CommSec in as little as 5 minutes.
  • Compare & monitor stocks, get expert stock recommendations, and keep your strategy on track on CommSec's great range of research and trading tools.
  • Offers access to over 25 international markets, with expert stock recommendations to help you manage risk and achieve your financial goals.
Bell Direct

Brokerage Fee

$15.00

Tradable Assets

Shares, ETFs, Warrants, Interest Rate Securities, Options, mFund, Exchange Traded Bond units

Tradable Indices

ASX

Signup Bonus

N/A

Highlights

  • When you trade with Bell Direct, we give you access to the latest research from the Bell Financial Group.
  • Use Bell Direct’s ETF comparison filter to compare the features of the ETFs in the market.
  • Trade with Bell Direct and you’ll receive 3 bullish and 3 bearish trading ideas each day in your inbox.
Sharesies

Sharesies

Brokerage Fee

N/A

Tradable Assets

Shares, ETFs

Tradable Indices

AU, NZ and US markets

Signup Bonus

Get a $15 top-up in your Sharesies Wallet when you sign up on or before 31 August 2021.

Highlights

  • Choose from over 3,000 companies and Exchange-Traded Funds (ETFs) across Australia, New Zealand and the US.
  • No minimum investment required.
  • Easy to use platform. Get the tools you need to feel confident, whether you’re an experienced investor or just getting started.
CMC Markets

Brokerage Fee

$11.00

Tradable Assets

FOREX Pairs, Indices, Cryptocurrencies, Commodities, Shares and ETFs, Treasuries.

Tradable Indices

Top 30 exchanges around the world - US, UK, AU and more.

Signup Bonus

N/A

Highlights

  • Trade your preferred instruments such as FOREX, Indices, Cryptocurrencies, Commodities, Shares & ETFs and Treasuries from around the world.
  • Keep your trading costs down with competitive spreads, commissions and low margins.
  • CMC Markets' educational material is written by a team of global market analysts and strategists with many years of experience trading in financial markets.
IG

IG

Brokerage Fee

$8.00

Tradable Assets

Shares, Commodities, FOREX, Cryptocurrencies, Share CFDs, ETFs, Bonds.

Tradable Indices

Top 80 exchanges around the world - US, UK, AU and more.

Signup Bonus

N/A

Highlights

  • Get spreads from 1 point on the FTSE 100 and Australian 200, and 0.4 on the US 500.
  • Give yourself an edge with the only Australian provider to offer weekend trading on key indices.
  • Better deals for active traders. Get more value with cash rebates.
nabtrade

nabtrade

Brokerage Fee

$14.50

Tradable Assets

Shares, mFunds, Fixed Income, ETFs, Options, Hybrids, Trust, Warrants

Tradable Indices

AU, Hong Kong, Germany, UK and US markets

Signup Bonus

N/A

Highlights

  • Trade domestic and international shares online from $14.95
  • Earn a variable 0.40% p.a. on your cash - on balances up to $1 million.
  • Trade in the US, UK, Hong Kong and Germany

Overview

Small and medium-sized companies are usually privately owned and have a limited number of shareholders or owners. But once a company grows to a certain size – in either profitability or assets – its owners may decide to list it on a stock exchange in order to access the capital they need for further growth. New shareholders buy shares in the company in an Initial Public Offering (IPO), giving the company the cash it needs to continue or expand its operations.

Shares confer ownership

Each shareholder becomes a part-owner of the company for as long as they hold at least one share, although shares are usually traded in much larger parcels than a single share. Shareholders may receive regular distributions of a company’s profit, based on the number of shares they hold, and these are called dividends.

How shares are traded

Shares can be bought and sold electronically on the stock exchange during every day that the stock exchange is open. The trading of shares is carried out by an intermediary called a stockbroker or share broker (or simply a broker), on behalf of both buyers and sellers. Sellers can nominate a price at which they are prepared to sell a specified number of a particular company’s shares, and buyers can nominate a price at which they are prepared to buy them. When the two prices correspond, a sales transaction can be completed, and a current market price for the shares is established. A broker’s client may also agree to buy or sell at the prevailing market price rather than nominating a specific price.

In Australia, shares are traded electronically on the ASX trading platform, and trades are settled through CHESS (Clearing House Electronic Subregister System).

Why shares are traded

There are plenty of reasons why shares are bought and sold every day:

Long-term share investors

Shares are a popular form of investment, in the hope of long-term asset growth and possibly dividend income. Long-term shareholders are likely to buy or sell shares infrequently, and their activity is better classified as share investment rather than share trading.

Gradual share price movements

As a company’s profitability and assets increase, the value of an individual share in the company will usually increase proportionately, and the market price of the shares on the stock exchange will increase as a result. The converse is also true – companies with declining profitability usually see their share price falling. Individual share prices are also affected by supply and demand, and other factors.

Sudden share price movements

External factors can affect individual, industry-wide, nationwide or even global share prices. Such factors could include the release of profit results or profit forecasts by the company, a natural disaster, a major regulatory breach resulting in a large cash penalty, a sudden shift in consumer sentiment, a change in central bank interest rates, a large-scale war affecting national economies, or a global financial crisis or pandemic.

Short-term share traders

Short-term share traders try to predict or anticipate these more abrupt changes in the price of individual shares, and aim make a profit by regularly buying fairly large parcels of shares when they think the price is lower than it should be – or will soon be – and selling them when they are satisfied with the profit they have made or when they think the price has reached a temporary peak. “Day traders” may try to realise a profit by buying and selling a particular parcel of shares within a day, or slightly longer.

Risks and rewards of share investment and trading

Investing and trading in shares is inherently risky. It’s not like depositing money in a bank account, where you can be reasonably confident that your investment will not grow particularly quickly (given current low interest rates) but nor will it shrink (except in the unlikely event of negative interest rates). Share prices are volatile and can be affected by many factors, just a few of which have already been mentioned. This makes it possible for both investors and traders to lose significant sums.

But along with greater inherent risk there is a greater potential for reward. In spite of wars, natural disasters, terrorism and stock market crashes, Australian share prices have increased by an average of 6% per year over the last century, according to the Reserve Bank. Short-term share trades have a greater exposure to both potential losses and potential gains from sudden price fluctuations.

Spreading the risk

The risk of loss from share trading can be mitigated to some extent by having a diversified portfolio. That’s an elaborate way of saying “Don’t put all your eggs in one basket”. By spreading your investment or trades across a range of shares in different companies and market sectors (e.g.financial, industrial, technology, retail, agricultural) you become less exposed to individual share price fluctuations.

Another way to achieve this is to invest or trade in Exchange Traded Funds (ETFs), a type of tradable security which aggregates a range of shares and other financial investments, creating an automatic spread of risk.

You can also choose to invest in units in a managed fund, a diversified portfolio chosen and administered by an investment advisor. Some managed funds may be listed on a stock exchange, but many are not.

Other types of tradable securities

“Share trading” may be used as an umbrella term for trading in all types or securities or financial instruments listed on a stock exchange, which, as well as individual company shares could include:

  • ETFs
  • Managed funds
  • Options, futures, warrants and other derivatives
  • Fixed income debt securities

Capital gains tax

Any profit you make from buying or selling shares is subject to capital gains tax (CGT) in Australia. Capital losses can be offset against capital gains. Gains made by individual taxpayers may be discounted by 50% if the shares have been held for at least 12 months. The tax rate for net capital gains is the marginal tax rate of the individual in the year they were gained.

However, anyone who engages in buying or selling shares as a form of business income may be able to be classified by the ATO as a share trader, which removes the 50% CGT discount for shares held for one year but confers other tax advantages.

This is general information only and is not intended to constitute tax advice. Consult a tax professional for advice about your personal situation.

Online share trading platforms

You can buy and sell Australian shares and other securities without using a traditional broker if you use an online share trading platform. Signing up to one of these is quick and easy, and they generally have low transaction fees, no account fees for a basic account, and low minimum trading amounts. Some of them offer access to overseas markets, such as the NYSE and NASDAQ in the US.

Online brokers typically offer two types of account:

  • A free basic account with no monthly or annual fee, possibly market price trades only, limited analysis or guidance and delayed rather than real-time market information
  • A premium, subscription-fee account, with additional reporting and guidance, live market data and options for setting a share price at which you are prepared to buy or sell

Traditional full-service share brokers

A full-service stockbroker may be more suited if you feel you need expert advice about buying and selling shares and other securities. Traditional offline brokers will provide market and individual company research, make buy/sell recommendations and possibly create a tailored investment plan for you. As a result, they will usually charge higher fees for transactions and ongoing services.

Some full-service brokers also have an alternative online trading platform.

Cost of share trading

Over and above the purchase price of the shares you buy, there are other fees you may have to pay, including:

  • A transaction fee each time you buy or sell a parcel of shares (also called a ‘brokerage fee’ or ‘commission fee’). Transaction fee structures can vary (e.g. flat fee, or percentage of trade amount, or fees that vary according to the number of trades you make per month). Online platforms tend to be cheaper (e.g. between $5 and $30 per trade), compared with a traditional broker’s typical flat fee of $50+ or percentage fee of 2%+.
  • Monthly or annual account fee charged by some brokers or online platforms for the provision of premium services.
  • Cash withdrawal fees may be charged if you want to withdraw money from the special bank account you usually need to fund your trades.
  • Foreign exchange fees or a foreign exchange margin will be payable if you need a foreign currency account to trade in overseas shares.

Inactivity fee, possibly charged if you make too few trades in a given period.

Learn about share trading platforms

Find out how to use an online share dealing platform to buy and sell shares and other assets.

  • Pros & cons

  • Tips

  • FAQs

  • Glossary

  • Guides

Online platforms have a low fee structure and are easy to use

Online share trading platforms rely on low fees, simple registration processes and easy-to-use websites and apps to attract customers.

Online platforms provide only limited free service

Unlike more traditional brokers, online trading platforms limit the services they provide, although you can usually opt for a higher service level if you’re willing to pay a subscription fee.

Shares can increase in value over time

Investing in shares over the long term can lead to capital growth. According to the Reserve Bank, Australian share prices have increased by an average of 6% per year over the last century. Some individual shares in the last 10 years have greatly exceeded this performance level.

Share trading and investment offers the potential for better returns

In the current low-interest environment, share trading and investment can potentially be more rewarding than bank savings accounts and easier to get into than property investment. IPOs in particular can sometimes deliver rapid profits, although there’s no guarantee that this will be the case.

Share trading can be stressful

You don’t normally need to worry about a bank deposit declining in value. Even a property investment, though it may fall in value, is not likely to do so overnight. But share trading is not for the faint-hearted, and can involve you in a roller-coaster of emotions and nervous tension.

Share trading is risky

Share prices are volatile, and if you pick the wrong stock, or the wrong time to buy or sell, there is a potential to lose a large part of the value of your investment. Share prices can change quickly depending on factors outside your control.

Acquire some knowledge first

It’s a good idea to familiarise yourself with the ins and outs of the stock market and share trading before you take the plunge into buying shares. This may involve studying the economy, interest rates, exchange rates, overseas stock market movements, company reports, analyst reports, and business news. You may want to make some simulated trades first, by buying and selling notional parcels of shares and working out how much you would have gained or lost had they been real trades.

Blue-chip stocks usually have better returns and are less risky

Companies in the ASX Top 50 or Top 100, with a large market capitalisation, tend to be less risky to invest in, although they may offer less potential for short-term gains than smaller companies.

Compare brokers and online platforms to choose the one best suited to you

You’ll need the services of a broker or online share trading platform to act as your intermediary when buying and selling shares. Carefully compare the services offered before you choose which one (or more than one) to use. Features to consider include:

  • Which sharemarkets they trade in. E.g. ASX only, US markets only, or a combination of ASX and overseas markets.
  • Level of service provided. E.g. performing the buy or sell transaction plus limited reporting and guidance, versus premium reporting and analysis and possibly buy/sell recommendations (this last item from full-service brokers only).
  • Minimum trade amounts, if any.
  • Fee structure and charges for transactions, any monthly or annual subscriptions, cash withdrawals, foreign exchange and account inactivity.
  • Ease of signing up. Online brokers may have a less complicated registration and identification process.
  • Ease of use. You may need to make quick buy or sell decisions, which are likely to be easier using an online platform or trading app.
  • CHESS or omnibus account? Will you own your shares individually via a HIN (Holder Identification Number) registered at CHESS, or indirectly in a combined or omnibus account? The latter can be less expensive and have lower minimum trades, but is also more risky if the broker hits financial difficulties.

Consider your investment goals and risk appetite

Before you begin, think about your investment goals (e.g. long-term asset growth, retirement fund, home purchase deposit fund, dividend income, short-term trading profits) and risk appetite (i.e. how much you are prepared to – or can afford to – lose, before the risk outweighs the potential benefits). This will help you determine what kind of shares to buy, how long you are planning to hold them for, and how much you are willing to invest.

Diversify to spread the risk

Diversification, or not putting all your eggs in one basket, is a good strategy to spread your risk. You can do this by aiming to cover a variety of market sectors (e.g. industrial, financial, technology, retail) or by investing in managed funds or ETFs.

Start small if you’re a newcomer to share trading

Don’t rush into the market with large sums of money if you’re not an expert. It takes time to acquire trading competence, and patience to build up a portfolio or realise substantial trading profits. Perhaps put your toe in the water with one of the online platforms that permits small trades and has low fees even when your activity level is small.

Can I trade international shares?

Yes. Some online share trading platforms specialise in US stocks (NYSE and NASDAQ) and offer access to other markets as well, such as the LSE or TSE. Transaction and foreign exchange fees can be very variable, so do your homework before committing.

Some traditional offline brokers also offer access to overseas stock exchanges, but often only for very large parcels of shares.

How can I buy and sell shares?

To buy or sell shares or other securities on a stock exchange you will normally need to use either a stockbroking service or an online share trading platform.

Exceptions to the need for a broker or trading platform include buying shares directly from a company when there is an IPO, or investing in shares through your superannuation fund.

How do I decide which broker or share trading platform to use?

Carefully compare the services they offer to decide whether they have what you need (e.g. access to overseas stock markets, ability to set specific buy/sell prices, type of reporting, analysis and advice provided). Also compare their fee structure and fee amounts, and how easy it is to sign up and to make trades.

How do I sign up with an offline broker?

Registering with a traditional broker can be more complicated, because they are obliged to assess your financial situation and consider your investment goals. You’ll need to make personal contact with an advisor and complete fairly extensive paperwork and ID requirements.

How do I sign up with an online share trading platform?

Signing up with an online broker is quick and easy. They will need your name and contact details, the uploading of some identification documents, and may require you to open a special bank account to fund your trading activity and receive any sales proceeds.

How much does share trading cost?

Online platforms are less expensive than traditional offline brokers, with typical fees ranging between $0 and $10 per buy or sell transaction. But there may be additional fees if you want to opt in to premium services, buy and sell overseas shares, and withdraw cash from your share trading bank account.

Offline brokers provide personalised services, advice and recommendations, and charge much higher fees, typically starting at $50 per transaction or 2% of the amount traded.

Is online share trading safe?

Yes, if you use a trading platform with:

  • A good reputation. Read online reviews to find out.
  • Strong financial backing. Their website should provide details.
  • Reliable encryption technology to protect sensitive information.
  • Secure login and transaction verification methods, preferably using two-factor authentication.
  • Fraud prevention and compensation system, to help detect possible fraud and reimburse any losses you may suffer through fraud which was not your own fault.

Is there a minimum amount I can invest or trade?

Online platforms may have no set minimum, or a minimum trade amount of $100 to $500. Offline brokers may have a much higher minimum amount that you can invest or trade.

What is a share?

A share is a unit of equity ownership in a company. It may also used as a basis for calculating the equal distribution of company profits or dividends.

Other terms used, instead of ‘share’ , are ‘stock’ and ‘security’.

What sort of documentation will I receive when I buy or sell shares?

Most share transactions are registered at CHESS in the name of the shareholder, who is issued with a HIN. You will receive a holding statement from CHESS whenever you buy or sell shares, indicating the name of the share or other security, the quantity bought or sold, and the balance of your holding.

Who has the lowest fees, full-service brokers or online share trading platforms?

Online trading platforms tend to have lower fees because they offer a lower level of service, although some online platforms offer a premium subscription service.

ASX

Australian Stock Exchange

ASX Top 50 and ASX Top 100

The 50 largest and 100 largest companies listed on the ASX, with size being determined by market capitalisation.

ATO

Australian Taxation Office

Blue-chip stock

Shares of a major company regarded as a leader in their industry, normally a multinational corporation that has been operating for many years.

CHESS

Clearing House Electronic Subregister System, an ASX computer system used to record shareholdings and settle share trading transactions.

Derivative

A security, sometimes traded on a stock exchange, whose value is attached to a particular asset (such as a share) or commodity (such as a global market for a particular product). Examples included exchange traded options and exchange traded futures.

Dividend

The distribution of some of a company’s profit to its shareholders.

ETF

Exchange Traded Fund, a type of security, listed on a stock exchange, which aggregates a range of shares and other financial investments, creating an automatic spread of risk.

Fixed income debt security

A type of debt security giving regular periodic payments of interest and repayment of the principal on maturity.

Foreign exchange margin

An amount of profit, built into the rate at which one national currency is converted into another, gained by the institution buying one of the currencies and selling the other. It causes the difference between the mid-market exchange rate and the exchange rate actually used.

Future

A financial derivative, possibly able to be traded on a stock exchange, in the form of a contract that obliges the owner to buy or sell an asset in a specified quantity at a specified price on a specified future date.

HIN

A unique number issued by the ASX to clients of share brokers, identifying both the shareholder and the broker.

IPO

Initial Public Offering, when shares in a private company are first offered to the public by being listed on a stock exchange.

LSE

London Stock Exchange

Managed fund

A diversified portfolio of securities chosen and administered by an investment advisor.

Market capitalisation

The total number of shares issued in a company multiplied by the current share price.

NASDAQ

An American exchange for buying and selling securities – the world’s first electronic exchange – where leading technology companies like Apple, Facebook, Tesla, Amazon, Alphabet and Microsoft are listed.

NYSE

New York Stock Exchange

Omnibus account

A custodian model of shareholding, rather than being, for example, a shareholding registered to a specific shareholder under the CHESS/HIN system. An omnibus account is used by a broker to manage the various trades and combined shareholdings of its clients, rather than registering them individually with a third party.

Option

A financial derivative, possibly able to be traded on a stock exchange, in the form of a contract that confers a right, but not an obligation, to buy or sell a particular quantity of a particular security at a specific future date.

Portfolio

A collection of investments held by an individual or organisation, which may include any of:

  • Shares
  • ETFs
  • Managed funds
  • Debt securities
  • Derivatives
  • Other financial instruments

Security

Any financial asset that can be traded, including equity securities (shares), fixed income debt securities and derivatives.

Share

A unit of equity ownership in a company. Shares are also know as ‘stocks’ or ‘equity securities’.

Share broker or stockbroker

A professional trader, or service company, who buys and sells shares on behalf of clients.

Shareholder

An individual or organisation owning shares in a company.

TSE

Tokyo Stock Exchange

Warrant

A financial derivative, able to traded on a stock exchange, giving the holder the right to buy or sell, for example, a share, ETF, debt, commodity, currency, or basket of different securities, at a particular price and possibly on a particular date.