It's no longer cool to have a stockbroker. And it's just downright expensive. When you place a trade with a stock broker over the phone, you're subsidizing his infant's future college education, the payments on his Mercedes or his mistress's credit account at Nordstrom's. There's no need when you can use the Internet to research stocks on your own and then use the brokerage account that suits you best to trade them for a fraction of the cost.
Open an online brokerage account. Terms, conditions and fees vary from firm to firm; however, most brokerages, even the ones you remember as wholly brick and mortar outfits, have an online arm. Some operate solely, or almost solely, online. The process for opening an account also differs by company, but most allow you to open your account online and fund it by transferring assets from another firm, sending in a check, wiring money or electronically transferring cash from your bank account.
Research stocks. Once you have an online brokerage account, you should access to a decent amount of quality research. With some firms, particularly the larger outlets that still have a big offline presence, you can even receive help in selecting stocks for free or for a price. At the very least, most online brokerage offer detailed stock quotes, research reports and buy/sell/hold recommendations from an authoritative investment source.
Go to your brokerage's trading page. Alternatively, you can enter the symbol of the stock you wish to trade in the stock quote box that exists at some location on most pages throughout a brokerage's site. In either case, find the prompt that says something to the effect of "Trade" or "Make a Trade" and click on it.
Enter the stock symbol you wish to trade if it's not there already. If you don't know it, most sites provide symbol look-up. Simply enter the name of the company and the site generates the associated stock symbol.
Indicate how you want to trade the stock. Three of the most common choices are buy, sell or sell short. Enter the number of shares you wish to buy, sell or sell short.
Choose between the most common types of orders. Most investors will place a "market" order, which means your brokerage will fill your order at the next possible time when the stock market is open. If you place a "limit" order, you indicate the highest price you are willing to buy the stock for or the lowest price you are willing to sell it for. You'll also need to note if your order is "good for day," meaning that if your brokerage cannot fill it by the market's close, you want it canceled, or "open until filled," which means your order will stay open for as long as it takes for it be executed.
Submit your order. Check the order status page of your online brokerage account to see if your brokerage filled your order and at what price.
- If you have small amounts of money to invest each month and to start your account up with, consider online brokerages that cater to the small investors. Some firms specialize in buying a small number of shares (in as low as $25 or $50 increments) for investors on a regular basis -- weekly, bi-weekly, monthly -- for a nominal monthly fee or per trade commission, relative to other brokerages.
- The Financial Industry Regulatory Authority warns online brokerage account holders to mind the security of their just as they would any other. Log out of your account completely when you are finished working with it, change your password frequently, don't allow web browsers to remember you user name and password for you and watch over your shoulder for peeping Toms looking to steal your info while you view your account on a public computer.