Brokerage Account - Buying and Selling of Stock, Investing in Stock Markets | Investing in Stock Markets - B Com PDF Download

If you want to invest outside your workplace retirement plan, you need a brokerage account. And you do want to invest, because investing is one of the most effective ways to build wealth.

What is a brokerage account?

A brokerage account allows you to buy and sell everything from stocks and bonds to mutual funds, currency, futures and options contracts, depending on the broker.

Some brokerage accounts are taxable, which means the money you earn from investments within the account can be subject to capital gains taxes. But if your goal is to invest for retirement, you could open an IRA or Roth IRA at your broker to gain special tax benefits.

Is a brokerage account right for you?

• If you’re investing for something other than retirement, won’t need the money in the next five years and are interested in managing your own investments, then a regular, taxable brokerage account is a good choice. Here are our top picks for best online brokers.
• If your goal is to save for retirement, then you should first make the most of the free money available through your 401(k) match. To save beyond this for retirement, turn to a brokerage for a Roth or traditional IRA to get important tax benefits. Here are NerdWallet’s picks for the best IRA providers.
• If you’d rather have someone else do the day-to-day work of managing your retirement funds or other investments, consider a robo-advisor, which is a lower-cost alternative to a human investment manager. Here are our top picks for robo-advisors.
• If you are saving for a goal you want to accomplish in the next five years, steer clear of the stock market and consider an online savings account. Here is NerdWallet’s round-up of the best high-yield online savings accounts.

Stock marketing trading has been around for centuries, but lately, with the advent of the Internet, it has taken off to an entirely new level. Untold numbers of traders buy and sell stocks online these days because it is quick and easy – with far more access to stock exchanges than ever before.

If you want to learn how to buy and sell stocks, you need to know the basics of getting started. Here, I’ll cover the fundamental concepts of trading stocks online and how you can begin the process for yourself.

Getting Stated: Finding a Brokerage

Trading stocks online is made possible today through the use of online stock brokerages, which operate almost exactly like traditional stock brokerages full of professionals who place your orders with the system (i.e. the big boys in downtown New York City on Wall Street). An online brokerage differs from an offline one in the sense that they usually don’t offer financial consulting as a major part of their business.

A brokerage gives you trading access to the market through something called a trading platform, or an online portal that you can use to place orders, view metrics and charts, and manage your accounts. These platforms – the actual pieces of software that let you buy and sell – range greatly in terms of scope, power, and flexibility, but they all have the same basic functions.

Finding the right broker for you ultimately comes down to a few factors:

1. What asset class do you want to buy or sell? (Stocks, bonds, currency, etc.)
2. How much are you willing to pay in commission or trading fees?
3. How much capability are you looking for?
4. Do they offer free trades, bonuses, etc?
5. What is their minimum account requirement?

You can find a brokerage that is best for stocks, or one that offers free ETF trading, for example. Some have incredibly low fees – the lowest fee for an established brokerage is TradeKing, which offers $4.95 trades and broker-assisted orders (usually those are extra). Others may cost more but have more robust trading platforms, including proprietary platforms complete with real-time data, customizable interfaces, market research, and the like.

You can also find full-service firms that allow online trading plus the help of a trained financial advisor – but these services cost extra through fees or commission.

Determine your priorities. What do you really want in a brokerage? Write down your preferences for the list above and you’ll be able to more readily sort through the host of options out there.

Opening An Account

Once you have selected an online brokerage, you need to open an account.

Most brokerages today, in order to open an account, require you to supply them with your Social Security number, bank account information, and other identification. You don’t usually have to jump through hoops; opening new accounts is easier now than it has ever been.

The next step is to deposit your minimum requirement. Each brokerage has a minimum deposit that is required if you want to trade (although some brokerages, like Zecco, have no minimum for cash accounts). Fidelity, for example, requires $2,500 in your cash account and $5,000 in your margin account. Scottrade requires a $500 initial deposit, and E-TRADE requires a $2,000 deposit. TD Ameritrade is another major brokerage that doesn’t have a minimum for a cash account or a retirement account; you only need $2,000 in your margin account for margin trading.

Stock marketing trading has been around for centuries, but lately, with the advent of the Internet, it has taken off to an entirely new level. Untold numbers of traders buy and sell stocks online these days because it is quick and easy – with far more access to stock exchanges than ever before.

If you want to learn how to buy and sell stocks, you need to know the basics of getting started. Here, I’ll cover the fundamental concepts of trading stocks online and how you can begin the process for yourself.

Getting Stated: Finding a Brokerage

Trading stocks online is made possible today through the use of online stock brokerages, which operate almost exactly like traditional stock brokerages full of professionals who place your orders with the system (i.e. the big boys in downtown New York City on Wall Street). An online brokerage differs from an offline one in the sense that they usually don’t offer financial consulting as a major part of their business.

A brokerage gives you trading access to the market through something called a trading platform, or an online portal that you can use to place orders, view metrics and charts, and manage your accounts. These platforms – the actual pieces of software that let you buy and sell – range greatly in terms of scope, power, and flexibility, but they all have the same basic functions.

Finding the right broker for you ultimately comes down to a few factors:

1. What asset class do you want to buy or sell? (Stocks, bonds, currency, etc.)
2. How much are you willing to pay in commission or trading fees?
3. How much capability are you looking for?
4. Do they offer free trades, bonuses, etc?
5. What is their minimum account requirement?

You can find a brokerage that is best for stocks, or one that offers free ETF trading, for example. Some have incredibly low fees – the lowest fee for an established brokerage is TradeKing, which offers $4.95 trades and broker-assisted orders (usually those are extra). Others may cost more but have more robust trading platforms, including proprietary platforms complete with real-time data, customizable interfaces, market research, and the like.

You can also find full-service firms that allow online trading plus the help of a trained financial advisor – but these services cost extra through fees or commission.

Determine your priorities. What do you really want in a brokerage? Write down your preferences for the list above and you’ll be able to more readily sort through the host of options out there.

Opening An Account

Once you have selected an online brokerage, you need to open an account.

Most brokerages today, in order to open an account, require you to supply them with your Social Security number, bank account information, and other identification. You don’t usually have to jump through hoops; opening new accounts is easier now than it has ever been.

The next step is to deposit your minimum requirement. Each brokerage has a minimum deposit that is required if you want to trade (although some brokerages, like Zecco, have no minimum for cash accounts). Fidelity, for example, requires $2,500 in your cash account and $5,000 in your margin account. Scottrade requires a $500 initial deposit, and E*TRADE requires a $2,000 deposit. TD Ameritrade is another major brokerage that doesn’t have a minimum for a cash account or a retirement account; you only need $2,000 in your margin account for margin trading.