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How to Buy Stocks

how-to-buy-stocks

It’s rare that the name of an online company becomes essentially synonymous with the very transaction arena that it represents, but such is the case with online self-serve stock brokerage service E-TRADE, even though it has a number of competitors. And as goes the stock market, so goes services such as E-TRADE.

How to Buy Stocks Online

In the fall of 2010, E-TRADE posted its first consecutive quarters of profit since the pre-Recession days of 2007. Still, this was not enough to allay analyst fears that both the lingering effects of the mortgage crisis and reduced stock volatility will lead to less revenue in 2011 than predicted. E-TRADE charges a service fee of between $7.99 and $9.99 per stock trade transaction, depending essentially on the volume of trading a member commits to. Once a new E-TRADE account is opened and funded by means of a wire transfer, check or other means, the subscriber is ready to make trades. Other online stock trading services include Think or Swim, Trade House, Options House and Scott Trade.

Buying Stocks through a Stockbroker

The other way people buy stocks is by means of a stockbroker. There has been some flux recently of stock brokers from large firms such as Goldman Sachs to smaller, independent firms. The reasons for this trend include the feeling among some stockbrokers that they can more liberally recommend stock purchases to their clients and not be influenced by internal pressures to side with company endorsed items.

How to Become a Stockbroker

Stockbrokers in the United States must pass two exams, the Series 7 and the Series 63. Full-service brokers offer counsel and advice relating to a wide array of stocks, bonds and other securities, while discount brokers are more steeped in simply doing straight volume transactions for clients who already, typically, know what they want. Whether it’s through a real person or an online middleman equivalent, the basics of buying stock involve buy orders, sell orders, and stop limits.

 

Resources

Associated Press – “Analysts Temper E-Trade’s 2011 Estimates”, October 21, 2010, Retrieved November 15, 2010 from http://www.businessweek.com/ap/financialnews/D9J09G7G1.htm

E-Trade – Pricing, Retrieved November 15, 2010 from https://us.etrade.com/e/t/pricingandrates

Bloomberg – “Brokers Flee Brokerages as Asset Drop Shows Broken Model”, October 25, 2010, Retrieved November 15, 2010 from http://www.bloomberg.com/news/2010-10-26/brokers-flee-brokerages-as-declining-assets-show-broken-model.html

Motley Fool – Picking a Broker, Retrieved November 15, 2010 from http://www.fool.com/investing/brokerage/picking-a-broker.aspx

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