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Stock Trading App Industry Overview: Trading Goes Virtual

Stock trading apps are disrupting the financial industry. Here’s what you need to know about the most popular investment apps, and why they matter.

7 min read

Modern Money

Stock Trading App Industry Overview: Trading Goes Virtual

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Stock trading apps have seen a surge in activity recently: Popular app Acorns got about a 45% sign-up bump during March, while 3 million people signed up for Robinhood last quarter.

Naturally, the coronavirus pandemic is a contributing factor, as it keeps more people at home and away from in-person brokers. The turbulent stock market also may be causing more people to see opportunities, and growing financial literacy is boosting confidence about investing.

Financial institutions can use investment apps to reach new customers, particularly tech-literate users in the rising millennial and Generation Z demographics. But what are the best mobile apps for playing the stock market, and which ones best fit different situations? 

A look at a few of the most popular ones could give finance professionals a better understanding of why these models have gained traction, as well as the ways that app technology is disrupting the finance industry.


Robinhood is currently the most famous name in personal finance apps that focus on stock trades. A series of technical glitches earlier this year also made it the most infamous for a while, but the company says it has since improved both its infrastructure and capacity to avoid such issues. Naturally, the question of fulfilling that promise and rebuilding customer trust remains open.

Technological problems aside, Robinhood is now facing a shifting market. One of the app’s original major selling points was its ability to provide no-fee stock trades, but several competitors have emerged in that area, including those from major firms such as Interactive Brokers, Charles Schwab and Fidelity.

Robinhood remains simple, which can be an advantage for both beginning investors and those who want to take a more hands-on approach, but more experienced stock traders may find it a hindrance. A March survey found that it ranked last in categories such as research tools, portfolio analysis and investment choice.

Robinhood has added features such as fractional investments, cash management, more cryptocurrency options and portfolio profiles, and plans additional future expansions. Many, however, still view the app as a starting point for younger customers, who have the time and risk tolerance for its streamlined approach. Some analysts predict that such users may transition to more established brokers or investment banks as they want safer options.


Business Insider names E-Trade, which recently eliminated many of its fees, the “Best investment app overall.”  Risk portfolios, a large stable of mutual fund options, and the ability to customize profiles using social responsibility or growth stocks contributed to its high scores with the magazine.

Unlike Robinhood, this app comes from a parent company that got its start before smartphones, but not one with the pre-technology origins of some investment firms. E-Trade is a product of the 1990s and the dot-com-associated boom in day trading. Investment bank Morgan Stanley purchased it this February, adding a venerable name to E-Trade and more consumer focus to Morgan Stanley.

The app does require a $500 minimum balance before a user can begin investing with a Core Portfolio. More managed portfolios, such as those aimed at fixed incomes, require minimums of up to $250,000, and charge AUM fees. The wide variety of investment models, and the inclusion of IRAs as well as both joint and individual brokerages, could make E-Trade better than Robinhood at helping users scale up when they move from exploring the stock market to seriously investing.


The financial industry includes more than the markets inside the United States, and online stock app TradeUP now lets its users branch out. Its April move to incorporate Hong Kong trading provided access to a number of Chinese stocks, which, the Stock Exchange of Hong Kong Limited reports, make up nearly a third of capitalization in the market.

Investors might find this opportunity for portfolio diversification especially valuable in the current environment. The coronavirus pandemic caused turmoil in domestic stocks, and the immediate future of the economy is still uncertain. China, several months ahead on the pandemic timeline, could be a source of stability.

Other features of TradeUP include no-commission trading, bonuses for initial deposits in excess of $3,000 and explanatory heatmaps. The maps show upward-trending stocks in green, falling ones in red, and viewers can see them in increments ranging from a day all the way to year. It scores highly on security, but only allows users to trade a few classes of stock.

Cash App

Cash App has established itself as a popular way for people to send and receive money, with a user base of 24 million as of this March. The company introduced Cash App Investing during last year’s final quarter. It’s integrated into the main app, and builds on its ease of use, qualities that make it appealing to beginning investors.

The same qualities could frustrate those who want more features, however. Cash App Investing only supports stocks, not bonds, options or mutual funds. The app also doesn’t work for IRAs, trusts, joint accounts and many other types. Finally, users can’t access margin trading with the app.

As this is a very new app, however, some of the features Cash App Investing currently lacks could make their debut soon, and all investment-related activities it supports are free. One current option that could be an edge over comparable apps is support for fractional shares, which makes it easier to invest in expensive companies such as Amazon.


The lack of mutual fund access has been a flaw in many of the previously discussed apps. A number of others are moving to fill the gap, most notably fund-focused apps from well-known companies such as The Vanguard Group.

Vanguard doesn’t charge transaction fees for its own funds or a number of others, and its commission for the rest is just $20. Types of accounts include a variety of IRAs, 529 accounts for college savings and solo 401(k) funds.

Open stock options without commissions or minimums are also available on the app, although fractional trading is not a feature. Like TradeUP, Vanguard facilitates trading in foreign markets, and it provides access to reports from well-known sources. The options commission fees are comparatively steep, however, and the platform itself is fairly simple, without many features that would appeal to frequent traders.


The opportunity to trade stocks online, without even speaking with a human broker, is one that appeals to many young people.

It’s certainly been a mixed bag for brokerages and other financial firms. As with other shifts from the physical to the digital world, companies that can’t keep up with technology will be left behind, and even those that do make the transition can find their models changed in ways that hit their workforce hard. A general move toward eliminating commissions has also reduced revenue for firms, which may need to find other avenues to compensate.

On the other hand, trading apps and commission-free activity may be good for the industry in general, particularly in this time of social isolation. Major companies reported record amounts of trading during 2020’s first quarter, with investors in their 20s and 30s among the most frequent new entrants to the stock market.

Whether such people will eventually transfer to more complex trading, with personal input and management from brokers, remains an open question — but many apps have premium options to make the switch easier if it does happen.

Trading apps are just one of the factors making stock trading uncertain at the moment. They are, however, one of the few that are within companies’ control to some degree. By carefully researching apps and staking out places in the emerging landscape, firms can be more certain of their future clients.

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Isabel Kunkle is a technology and telecom editor at SmartBrief. She lives in Boston.