Investing

5 Free Simulated Stock Trading Tools for Paper Trading

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Last week I was talking to a group of college students and recent college graduates. The topic was investing. “Has anyone here ever invested in the stock market,” I asked. Nope. “Can anybody name a single mutual fund company?” Nope.

But it was the answer to the last question I asked that made me laugh. “If you wanted to invest now, how would you get started?” One future nurse responded, “I’d Google it.” Actually, that’s not a bad answer. We turn to search engines for answers to all kinds of questions.

So today I thought I’d share some resources for those looking to start investing in the stock market. There are a number of brokerages that offer free simulated stock trading tools. These tools are a great way to get your feet wet, so to speak, without risking any money.

But first a word of caution. These tools are ideal if you are interested in investing in individual stocks or ETFs. If what you want instead is to invest in diversified mutual funds, go to Vanguard, Fidelity or a company like Betterment.

What Is Paper Trading, Simulated or Virtual Stock Trading?

Simulated stock trading allows you to trade stocks and options without risking your money. The brokerage firms listed below that offer this feature will create an account for you with essentially fake money. You’ll see a balance (typically $10,000 or more) that you can invest, but it’s not real money.

A virtual trading account is just like a regular trading account with an online broker. These virtual accounts can be helpful in several respects. First, if you’ve never bought stocks before, placing a simulated order first will enable you to see how the process works. This can be really helpful, as I recall being very intimidated when I placed my first order. Second, if you plan to trade options, a virtual account allows you to explore various options strategies in a test environment before risking your own money. Finally, a simulated account can be a great way to teach your children about investing.

Below are five popular online brokers that offer a free stock trading simulator.

5 Free Simulated Stock Trading Options (for Paper Trading)

TD Ameritrade

TD Ameritrade paperMoney is a paper trading application available as a downloadable trading platform. With paperMoney, every user has access to a virtual margin account and a virtual IRA each funded with $100,000 of “play money.”

TD Ameritrade offers additional benefits such as advanced order types and the ability to backtest an idea to see if it would have worked in the past.

Zacks Trade

Zacks Trade is an online broker designed primarily for active day traders and multi-security investors. You can trade stocks, bonds, funds, and options, using three different trading platforms. And even though the platform is designed primarily for advanced traders, rather than beginners, they do offer a free paper trading tool.

By completing a brief questionnaire on the website, you’ll receive a demo account preloaded with $1 million in paper trading funds. The demo account will be emailed to you within one or two business days, giving you access to paper trading for 90 days.

Read our full review of Zacks Trade

E*TRADE

E*TRADE is one of the smaller diversified investment brokers, but it offers all the investment capabilities, trading tools and resources of the biggest brokers in the industry. You can trade stocks, bonds, mutual funds, ETF’s, options and futures on the platform, which also comes with round-the-clock telephone support. It’s also been integrated with the former OptionsHouse, making it one of the top options trading platforms in the industry.

E*TRADE offers a paper trading platform that allows you to practice trading stocks, options, and other securities without using your own money. That will help you to learn how the E*TRADE platform works, as well as to practice and develop your trading skills. This can be especially important when it comes to options, which is an E*TRADE specialty.

Read our full review of E*TRADE

Webull

Webull is a trading app where you can invest in stocks, ETF’s, and options commission-free, but one that also specializes in more generous leverage with margin accounts. The app comes complete with a paper trading to help you perfect your trading skills before you commit to investing with real money.

The app has a dedicated screen for paper trading and provides you with an initial balance of $1 million. However, that’s just the suggested initial balance. You can adjust that amount higher or lower depending on your own preferences. Of course, this is not real money, but only virtual money you can use to trade stocks and other securities and build a portfolio until you become sufficiently comfortable to begin investing with your own real money.

You’ll need to open a Webull account to take advantage of the paper trading tool. It’s available on both the mobile app and desktop versions and is completely free to use. The tool will accurately follow the live trading model for Webull, so you’ll be completely prepared when you begin trading for real.

Read our full review of Webull

Optionsxpress

Optionsxpress probably offers the most tools of any online broker. You get a free $25,000 virtual trading account and the ability to use optionsXpress account screens, trading tools and resources to trade stocks, options and futures.

You get access to:

  • Free real-time quotes and charts
  • 40+ innovative trading tools
  • Online or desktop virtual trading
  • Advanced orders such as trailing stops, one-cancels-other, triggered orders, and future spreads
  • Download positions to track and analyze virtual performance
  • Glossary and education center

Interactive Brokers

Interactive Brokers is one of the best brokers for the more advanced trader who doesn’t require a lot (if any) hand-holding. Their virtual trading platform is identical to their real platform (Trader WorkStation) and just as complex. However, when you use a paper trading account, you’ll have limited access to the Client Portal/Account Management functions. But you’ll still have the full range of trading facilities using real market conditions, but in a simulated environment.

They offer access to more markets and instruments than almost any other broker and at the lowest cost. If you are just starting out, stick to one of the brokers mentioned above. However, this is one of the benefits of virtual trading – you can learn the platform without fear of losing money.

Resources available include:

  • Stock, ETF and fund screeners
  • Education center
  • Automated trading
  • Financial calculators

Read our full review of Interactive Brokers


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