There is a company I would like to invest 0 in. I believe it will be very successful in a few years. There are sites like etrade or ameritrade but they talk about .99 fee. I don’t understand this. How does it work? The stock right now cost per share. Do I have to pay etrade .99 per stock that I buy? What other fees do they charge, and can I sell and get my money whenever I want?
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5 Comments on “Buying stock online for a beginner?”
BuffettCapitalists.com 10th March 2010
It’s per trade, no matter how many shares you buy.
Shyla 10th March 2010
You can also look at the likes of Zecco. They charge a flat rate of $4.5 per transaction (how many ever shares you buy). The transaction is free if you maintain an account of over $25K.
Which is this company?
Robert M 10th March 2010
got to start sometime
with 500 you can buy 24 shares, pay the 9.99 commission, and have 10.01 left over.
there may be an additionsl nominal security fee, usually less than .50
you can sell anytime, as long as their is a buyer, funds usually available 3-5 days after sell order is executed.
MVD34 10th March 2010
It is highly unlikely that you will profit from trading with portfolio balance of less than $100,000. The numbers all stacked against you…but go ahead and prove the researchers right. If you cannot keep your average transaction costs below 1% per trade and per year, you will be unable to compete with index funds. If you cannot diversify your risk with at least 3 (but 5 is better) unrelated, simultaneous investments your odds of being wiped out by a series of catastrophic disasters are better than even in any 12 month period. If you use leverage, the odds of such a wipe-out increase to nearly 100% over rolling 18 month periods.
That said, investing in mutual funds or ETFs for the long run (3 decades or more) can be profitable, if you keep your trading costs and annual fees (in total) below 2%.
$500 is mutual fund money, because, yes, trading takes a commission on both sides — buy and sell — every time for small traders.
You might want to look at Buyandhold.com or sharebuilder.com which are orientated toward small investors.
gen 10th March 2010
A Stock Broker commission is a flat charge you pay for their service of purchasing stock for you.
So, if you have 500$ and you want to buy stock at 20$ a share you can buy (500 – 10)/20 = 24.5 shares.
You pay the commission once when you buy the stock and once when you sell the stock, if you sell off small portions of the stock over time you will likely pay the commission each time.
Their can be some extra fees depending on how you choose to buy the stock, such as on margin, but really you don’t have to worry about it.
Personally i recommend scottrade.com for trading stocks