Where to Purchase Stock on the Internet

Advances in computers and communication technology have liberated traders from the traditional broker and investor relationship. Several online brokerages exist to allow unprecedented access and ease of use to global stock markets, with historically low cost per trade.

Things You'll Need

• Capital to invest
• Reliable Internet access

Instructions

1. Browse. Compare the offers of several online brokers and pick one to utilize. See resources below for several common services. Details to consider when comparing stock trading services include account minimums and other opening requirements, execution of trades, interest rate on cash, FDIC coverage, and branch locations.

2. Open an account. Purchasing stock on the Internet usually requires opening an account with an online broker. To open an account, fill out a contract and fund the account. This is usually done with a check or wire transfer, though cash deposits may be possible at some branch locations. Beware that all investing and stock trading involves risk of loss, so only use funds that can be lost.

3. Learn the platform. Almost all online brokers have their own proprietary trading platforms that offer bid and ask information as well as other crucial trading data. Most provide tutorials for using their trading platforms, though, if preferred, trades can be placed over the phone with a live broker, usually at additional cost.

4. Use charts. When planning trades, it's good to have a price in mind to pay and a target at which to sell. Charts give a unique visual perspective on price action over time and, using special techniques of analysis, can yield useful trading entry and exits points. Most online stock trading services provide their own charting services, but if not, many private charting platforms are available.

5. Request additional permissions. The basic brokerage account allows for trading stocks. With time and experience, it may become desirable to requests permission for trading options, shorting stocks and trading on margin. If these permissions are not granted upon opening the account, they can be requested later by filling out an additional contract.

Tips & Warnings

• Most online stock trading services offer individual, joint, corporate, trust and club accounts, and filling out the correct contract is crucial. Most offer online and over-the-phone assistance. Usually at least a Social Security Number or Tax ID number is required, as well as verification of a bank account and physical address, so have these handy.

• It may be helpful to practice trading with simulators before deploying real capital by buying stock on the Internet.

• Do not depend on stock trading for short term income. While making money is obviously the goal, needing profits to meet near term commitments tends to produce bad investment decisions.

• Access to an online broker is subject to Internet conditions. High-volume trading days can lead to delayed quotes or partial execution of orders.

• Sensitive personal information is at greater risk of theft when recorded online.

• Using an online broker involves significant risk and the possibility of financial loss. Whenever possible, contact an investment professional before acting on any advice

Resources

• Charles Schwab
• TD Ameritrade
• E*Trade Financial
• Interactive Brokers
• Scottrade