How to Trade Stocks Cheaply

To make money in the stock market, you have to buy and sell stocks. Different stockbrokers and banks charge fees, including commissions, margin rates, inactivity fees and spreads. There are many ways to lower your cost of trading stocks.

Difficulty:

Easy

Instructions

1. Go online and search for stockbrokers and other institutions offering financial services. Pay attention to their commissions, margin interest rates, withdrawal and deposit fees, check fees and inactivity fees. Select a discount stockbroker with lower fees and good trading platform. When you buy or sell stocks, the stockbroker will deduct these fees from your account balance (see Resources below).

2. Buy stocks direct from the issuing companies. Many companies in United States offer direct stock purchasing plans for modest fees. These fees are usually lower than you would pay using a stockbroker.

3. Buy and hold stocks for a long time. Buying for the long term cuts down on your monthly trading costs since you are not constantly buying and selling stocks. This may also allow you to maximize your profit potential.

4. Buy stocks through mutual funds to lower your trading fees. Mutual funds don’t charge per trading fees, and dollar-cost-averaging may help you increase your portfolio over a period of time.

Resources

• How to buy stock directly from the companies
• How to trade stocks for a beginner
• Online stock investing and managing stocks
• Stock trading for beginners