Topic: Case stock ticker
July 17, 2019 / By Gale Question:
I want to start trading and buying and selling stocks, so I would like to open an account on one of the sites. Do they work, which one should I use, and how do they work? Thanks
Derby | 3 days ago
Yes, they certainly do. Two of the best ones are Scottrade and E*Trade. I personally have an account at E*Trade, but have friends who use Scottrade and have heard only good things.
Both sites have extensive educational material on investing which, if you're serious about this sort of thing, will probably find helpful.
E*Trades Educational Page: https://us.etrade.com/ctnt/investor-education-center/educational-resources?ploc=edu-nav
First, you'll need to setup an account, which can be a rather annoying process and takes several days or even a couple of weeks. You need to give them lots of information about yourself, as well as which kind of account you'll be using (Cash, Margin - trading "on margin" is where, rather than using cash, you use things as collateral to fund your trades, and so, if you do badly, you could lose the things you use.. like your car - Retirement, etc.) and then you need to provide them with your bank account. For simplicity, I will only describe what you need to do if you open a Cash account at E*Trade; I've never made a retirement or margin account.
Once you do that, they'll make a small deposit in your bank account (a few cents). After you see the deposit in your bank statements, you'll provide them with the amount they deposited. This process verifies that you are, in fact, the owner of the account that you provided. After this has occurred, you're almost ready to start investing. All you now need to do is to put money in your account! For eTrade, at least, the minimum amount is $500. This is what I started out with. However, preferably, you will want more in your account, as I will explain in a minute.
From here, you're ready to trade! All you need to do is to identify what you think will be a profitable company to invest in (Ford, for example). Once you do that, you decide how many shares you will buy. Lets say that you have $500 in your account and are planning on buying Ford (whose stock ticker, or abbreviated name, is F, which I will be using for the remainder of my description). As of yesterday, F was at $15.68. This means that you will be able to buy 31 shares (500/15.68*31). This means that the amount of money left in your account will be 13.92. However, the transaction isn't over. You see, the way companies like E*Trade make money is through things called "commissions." A commission is a sort of a fee that you have to pay each time you buy or sell a stock. For E*Trade, the commission for purchasing a stock is $9.99. So, you actually wont have $13.92 left in your account but $3.93.
Alright, so the time comes to sell your stock. Lets say that F is now at 18.00. For 31 shares, that puts your revenue at $558 (31*18), and, since you paid $468 when you bought F, you've made $72 (almost 15%)! However, it's not that simple. First off, you need to remember that you paid $9.99 in commission. That brings you down to $62. After that, you now need to pay for the sale commision, which is $10.00. That now brings your revenue down to $52. From here you will need to pay taxes on your income. I cannot determine how much you will have to pay in taxes, but it will probably be above $10 and so that means that you've made less than $40 from your original $72. This is why it is better to trade with more than $500 in your account; when you have more money, the commission you have to pay on your trades is more inconsequential. If you were trading with $1,000,000 (which isn't actually possible, you'd need a professional broker for that, in which case you wouldn't actually pay commissions but don't worry about that!), $20 in commissions would reduce your revenue by a tiny amount, less than a thousandth of a percent. In comparison, $20 in commissions from your $72 gain reduced your 15% revenue by 30%!
I had said so much more but Yahoo says it was too long. Sorry about that. Good luck and check out the educational pages on ETrade and Scottrade!
Asking for someone to pick a good on-line broker for you is like asking someone to pick a good car for you. A stranger only knows what they like... they know nothing about what you'll need.
Figure out what you'll need by learning. If you learn the basics you'll have a better idea of what tools will work for you. If your goal is to hold stocks for very short times you want to learn trading.
The key skills are;
Read 6-12 books on trading (which is different than investing). Pick books from these two lists;
The platform you pick is critical...... because it will either help you make money... or not.
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For more info: http://pennystocks.toptips.org
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They definitely work. You can research stocks and mutual funds. There is a cost to buy and sell stocks, but mutual funds usually have no fee. I would suggest tirade through scotiabank. If you don't have a tax free savings account yet, then open a trading account as a Tfsa and then you don't have to pay tax on your gains. Hope that helps