How to Follow a Mutual Fund Trade
Many online stock brokers allow investors to buy and sell mutual funds with little or no commissions, even with no-load funds. Mutual fund share prices are only set once a day, so they are not appropriate for day trading strategies, and it is often not possible to know immediately at what price a mutual fund settled.
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Instructions
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Open up the mutual fund trading screen of your online brokerage account. Enter the symbol of mutual fund you want to trade and the dollar amount or number of shares. Mutual funds can be purchased in fractions of a share, so a dollar amount trade is common. Check the box to buy or sell and the box that indicates you have read the prospectus and select "complete order."
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The mutual fund order should show up on the pending orders screen of you brokerage account. Mutual fund orders cannot be completed until after the market is closed and the fund price is set for the day.
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For most mutual fund trades you can modify your order up until 4:00 pm EST. Check with your broker for specific rules. Make any order changes before the cutoff time.
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After the stock market closes, start to check on the order status to see if it has completed. The online broker will not be able to complete the trade until the mutual fund company publishes the fund price for that day.
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When the order indicates completed, make a note of the fund share price and the number of shares bought or sold.
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Tips & Warnings
Mutual fund share prices are only set once a day after market close and that is the price for all trades placed that day. It is not possible to determine in advance what the actual price for any mutual fund trade will be.
Mutual funds are usually not appropriate securities for short term trading. Exchange traded funds, or ETFs, trade throughout the market day and are a good vehicle to profit from shorter market moves.
