Best Brokers for Short Selling

Soon after online forex broker eToro, then known as RetailFX, started offering commodities for trade, it gathered a large trader community.

The team behind it was quick to uncover the power of this community and soon launched its social trading feature, for which eToro is famous today. The new feature, which allowed novice users to automatically copy the investment strategy of successful traders on its platform, was a huge success. 

Since then, eToro has significantly diversified its offer, making room for new investment opportunities and more satisfied traders.

Ease of Use

eToro understands the importance of inclusivity. That’s why this trading platform was built for beginners and experts alike, with an easy-to-use and intuitive interface. 

Some of the most notable features of this platform are Social Trading and Smart Portfolios. Social Trading, as previously mentioned, allows anyone to copy top investors’ trading strategies with just a click, while Smart Portfolios offer a shortcut for building a well-balanced portfolio.

These are basically templates carefully created by the eToro investment team or eToro’s partners, which focus on specific market segments so investors can choose a theme they can relate to, for example, Hardware & Electronics, Consumer Goods, Energy, Commodities, etc.

Users can effortlessly research the stock they are interested in with the help of TipRanks analytics. 

Traders who have a significant number of followers, i.e, other traders who copy them, can participate in the Popular Investor program and earn up to 2% of their total assets under copy.

Stock and Other Investment Options

At eToro, you can choose among 2,000-plus investment options, including shares available for shorting or longing, numerous cryptocurrencies, ETFs, commodities, and indices. 

Not sure which one you’d like to trade? eToro has you covered. Every new account with this platform gets a virtual portfolio with $100,000 on it. It allows novices to practice trading without risking losing real money.

Pricing, Fees, and Payment Methods

eToro’s pricing model is 100% transparent, without any hidden fees for investors to worry about. It has no management, rollover, or broker fees for investing in stocks. You can purchase these in bulk or, on the contrary, buy fractional shares, with the minimum investment amount being $10. 

At eToro, you can make your deposits via bank transfer, credit cards, Neteller, Skrill, PayPal, Trustly, Rapid Transfer, Sofort, and local online banking options. Deposits are typically free of charge, while withdrawals incur a fee, and so do currencies other than the American dollar.

Reputation and Customer Support

eToro is a multinational company, and each of its subsidiaries is regulated by the local authorities: Its European branch by the Cyprus Securities Exchange Commission, the UK one by the Financial Conduct Authority, and the Australian one by the Australian Securities and Investments Commission.

eToro has an extensive help center available to its traders. In case something goes south, its customer support team is available Monday to Friday via live chat available on the site.

Webull is a great choice for anyone dipping their toes in the investment waters as well as for experienced traders looking to short stocks. It offers commission-free trading, excellent tools for both analytics and trading, and top-notch customer support that’s available round the clock.

Its biggest selling point is probably the easy-to-use interface which makes it attractive for beginners, although the lack of educational resources hurts it a bit in this regard. 

Ease of Use

Webull is one of the most accessible platforms to start trading on, as even complete beginners will have no problems learning the basics, while seasoned users will likely find its advanced and intelligent tools and services extremely useful. 

If you prefer making trades on your mobile device, you’d be glad to know that Webull offers an equally accessible and well-designed mobile version of its trading platform. Even though the app is optimized for smaller screens, it doesn’t sacrifice any features.

All the advanced charts, indicators, and voice commands are still available to you on mobile. 

Stock and Other Investment Options

Apart from shorting stocks, at Webull, you can diversify your portfolio by trading stocks, options, crypto, IPOs. The accounts you can open at Webull are individual brokerage accounts and IRAs. 

However, some commonly offered securities, such as mutual funds and bonds, are lacking.

Pricing, Fees, and Payment Methods

One of the main reasons someone might decide to go with Webull as their platform of choice is the fact that it is entirely commission- and fee-free. However, there’s an annual margin rate that varies between 3.99% and 6.99% and fees charged by regulatory bodies and exchanges, so make sure to inform yourself of these beforehand. 

As for the payment methods, Webull accepts ACH and wire transfers. ACH transfers are free of charge for both deposits and withdrawals, while wire deposits typically involve some fees, which vary depending on whether you have an account with a US or non-US bank, so make sure to inform yourself of these before you make a deposit.

Luckily, Webull’s website is very transparent about its fees. 

Reputation and Customer Support

Webull’s reputation is undisputed, as it is a member of FINRA, SIPC, the NYSE, and Nasdaq. The membership in SIPC means your funds will be insured up to $500,000. What’s more, Webull’s clearing company, Apex Clearing Corp, provides additional insurance.

Note, however, that none of this applies to your cryptocurrency holdings, which are not FDIC- or SIPC-insured.

The customer support is very responsive, and many online reviewers gave it stellar scores. Webull offers 24/7 customer support, which you can reach via phone and email.

Interactive Brokers, also known as IBKR, was founded in 1993. Since then, it has continually provided its customers with competitive rates for trading on more than 135 markets. It has been highly regarded for years, mostly because of the state-of-the-art tools it offers to its traders to help them invest in a variety of financial products. 

Ease of Use

The IBKR platform was designed with experienced and active traders in mind. Beginners might have a hard time finding their way around, especially when we take into consideration how many options you have in terms of both tools and financial products offered. 

However, more experienced traders will find IBKR’s platform very well designed and its IBot, the AI-powered digital assistant, exceptionally helpful for navigating the platform.

The trading platforms can be accessed via your browser, mobile, or downloaded to your desktop PC. The mobile version is fairly limited in features when compared to the Trader Workstation. 

The Trader Workstation is a robust platform that’s perfect for active traders and investors managing multiple products. It offers traders flexibility not commonly found with other brokers, such as staging orders for later, creating conditional orders, and even connecting another application to it to place automated trades. 

Stock and Other Investment Options

If you want to have a truly diversified portfolio, Interactive Brokers is the place to start building it as it offers an impressive selection of products. Interactive Brokers offers short selling stocks, options, futures, forex (23 currencies), bonds, and funds. IBKR gives you access to 135 markets across 33 countries.

It also supports fixed-income products, including corporate and government bonds from Europe. 

With Interactive Brokers, you can also participate in fractional share trading, trading IPOs, warrants, Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.  

Pricing, Fees, and Payment Methods

Interactive Brokers, too, is very transparent about its fees, which are explained in detail on the website. The pricing model, however, is relatively complex. You can choose between an IBKR Lite and IBKR Pro plan.

If you choose the Lite version, the pricing will be fixed for most investment options, while with the Pro plan, you’ll be able to choose between fixed and tiered pricing. If you were to opt for the fixed pricing system, the rate per share would be $0.005. The same price applies to penny stocks. Options would cost you $0.65 per contract.

When it comes to payment options, you can fund your account and withdraw your funds via wire transfers, ACH transfers, RFP, checks, online payments, and direct rollovers. You can also use direct deposits and online bill payment options to fund your account. 

Reputation and Customer Support

All 10 of the IBKR offices around the world are properly licensed in accordance with the local regulations. Interactive Brokers LLC is a member of the NYSE, FINRA, and SIPC and is regulated by the US Securities and Exchange Commission and the Commodity Futures Trading Commission. Australian, Canadian, Hong Kong, UK, India, Japan, Ireland, Singapore, Central European offices are also registered with the appropriate regulatory bodies. 

IBKR’s customer support is highly rated by users. If you find yourself in need of the help from the team, you can send them an email, call them, or chat with them to get the information you need. You can also report a bug or another problem, request or vote for new features, participate in the community forum, and help other users solve their problems.

When the TD Waterhouse USE and Ameritrade merger happened in 2006, TD Ameritrade emerged. From there, it has grown into a brokerage that has more than 11 million client accounts with over $1 trillion in assets and processes approximately half a million trades daily.

You may have heard that another merger took place in 2020: This time, Charles Schwab acquired TD Ameritrade in a deal reportedly worth $22 billion.

Ease of Use

TD Ameritrade is intended for everyone, regardless of their skill level. Beginners can expect a personalized AI-powered learning experience and an intuitive platform that’s easy to get the hang of. The platform is filled with innovative features that’ll help both beginners and experts make their short-selling more profitable in no time.

The Educational Center offers various webcasts and the possibility to create your own personalized learning path by providing information about your financial goals. 

Stock and Other Investment Options

While TD Ameritrade is an excellent choice for shorting, you also have plenty of other options to invest in. TD Ameritrade offers stocks, options, mutual funds, and ETFs. You’ll also be able to trade bonds, CDs, futures, and exchange forex currencies. 

With this excellent variety of investment products on offer, we’re certain that you’ll be able to create a diversified portfolio.

Pricing, Fees, and Payment Methods

TD Ameritrade charges no commissions on US exchange-listed stock, ETFs, and options trades. OTC stocks come with a $6.95 fee. You don’t have to pay to use the platform itself and you don’t have to fulfill a particular minimum when placing your order. 

You can fund your account or make a withdrawal via ACH, which typically requires only five minutes and is by far the fastest method available. Wire transfers and physical stock certificates usually take up to a day, checks require one to three days, and transferring an account from another firm will take about a week. 

Reputation and Customer Support

TD Ameritrade is one of the most reliable brokers, regulated by the SEC and a member of both FINRA and SIPC. It currently has branches in 53 states and many more outside of the US.

In case you have questions or a problem related to your account, you can pay a visit to the closest branch, chat with the customer care team online, or give them a call.  

Charles Schwab is a household name that concludes our list of the best brokers for shorting stocks. Handling 2.2 million accounts that hold more than $7.8 trillion in assets, it’s a reputable broker and a good place to start (or continue) your investment journey.

Unlike many other brokerages that only offer trading platforms to their users, Charles Schwab provides a fully rounded service that, in addition to trading platforms for self-guided investing, also has a robo-advisor and experienced personnel available to help you reach your investment goals. 

Ease of Use

Charles Schwab’s trading software can be accessed through your browser or downloaded to your computer or mobile device. All platforms, even the short selling apps, have streaming data to offer, but also news and relevant quotes. You can also analyze trade ideas with the help of charts and studies. 

Experts’ insights, resources, and educational materials are available in case you need assistance with investing. Furthermore, you can also use the robo-advisor to maximize your chances of turning a profit. Finally, if you’re not happy with the services provided, Schwab will refund your fee or commission.

Stock and Other Investment Options

Currently, at Charles Schwab, you can short stocks with ease as it has excellent short stock availability, but you can also diversify your portfolio by investing in thousands of mutual funds on offer or trading more than 2,000 ETFs with $0 commission. The $0 commission applies to stocks as well. With Schwab, you’ll gain access to more than 50 international exchanges.   

Here, you also can trade bonds, options, futures, margin loans, annuities, and even get insurance!

Pricing, Fees, and Payment Methods

As mentioned before, this brokerage will charge you nothing for trading listed stocks, ETFs, and options online. Options come with a $0.65 contract fee. Trading OTC stocks will cost you $6.95 per trade. The company offers a satisfaction guarantee, which is not common among short selling stock brokers.

Anyone interested in stock shorting with Schwab should keep in mind that the company may charge a stock borrow fee for any open short position you have in your account. The fees change daily and depend on several factors, such as the supply and demand for the particular security. 

Transferring money into and out of your account if you’re already a Schwab customer is free of charge. For funding your account, you can use check deposits, wire deposits, and direct deposits. The processing times vary but typically take a day or two. For wire transfers, fees vary between $15 and $20.

Reputation and Customer Support

Charles Schwab is a member of SIPC, FDIC, and an Equal Housing Lender. However, its brokerage products are not FDIC-insured. 

If you experience any issues while trading on the platform, you can reach out to Schwab’s support team via phone, live chat (available 24/7), or you can visit a local branch. Currently, Charles Schwab has more than 360 branches, so if you prefer to get assistance in person, you’ll likely find a branch nearby.

Founded in 2003, Cobra Trading quickly became one of the industry leaders in providing brokerage services. We rate it highly thanks to its competitive rates and the availability of several trading platforms.

Ease of Use

Ease of use is, unfortunately, not something the Cobra Trading platform puts enough emphasis on, starting from the website itself. Not very beginner-friendly and geared more toward experienced traders, it offers three professional platforms. 

The DAS Trader Pro platform has advanced features such as charting, advanced order types, and multiaccount management, making it an excellent solution for multiinstrument trading and portfolio management. 

Sterling Trader PRO is the platform to go with when looking to trade equities. It’s also among the leading platforms for options trading, as it is fully customizable to provide an excellent trading experience. 

Lastly, Cobra TraderPro is a platform loaded with features that active traders or investors will find beneficial. It offers a short locate monitor, which will help you immensely when looking for shorting opportunities, but also advanced charting, hotkeys, and real-time Level 2 market data. 

Stock and Other Investment Options

On the Cobra Trading platform, you’ll also be able to purchase and sell ETFs, bonds, US stocks, futures, forex, and options. Unfortunately, it doesn’t offer any international stocks, and it remains to be seen whether this type of product will be added in the future.

Pricing, Fees, and Payment Methods

Cobra Trading has two pricing tiers: for shares and options. All trades are charged a $1 commission and are subject to other regulatory fees. If you were to trade up to 250,000 shares per month, you could expect to pay a $.004 commission per share. For 2,000,000 to 10,000,000 shares per month, the commission per share drops to $.002. 

Currently, you can fund your account via wire transfers, ACH bank transfers, or using a check. For wire withdrawals and deposits, there is an additional fee, which stands at $20. If you are depositing or withdrawing internationally, the price jumps to $25.

Reputation and Customer Support

If you are wondering about the reliability of Cobra Trading, you should know that the broker is a FINRA, SIPC, and NFA member.

In case you encounter any problems with this platform or its tools, you can contact the customer support team via phone, email, and live chat available on the site. The working hours of the support team are 7 a.m. to 4:30 p.m. (CST), Monday to Friday. If you need to contact the team outside the working hours, it’s best to send them an email.