How to Open a Share Trading Account
Opening a share trading account takes three to five business days for the account to be processed. To invest safely, you should have a good deal of knowledge of the stock market before opening a trading account. In addition, determine how much money you would like to invest before opening an account. Many brokers have minimum account policies. Some brokers require $100,000 whereas others require only $500.
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Instructions
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Choose whether you would like to trade with margin or with options. Margin is the ability to buy securities with a loan from a broker. Options are contracts that let the investor buy or sell a security at a specified price.
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Decide in advance what type of account you would like to open. Individual, joint, and IRA accounts are the most common. Other accounts include tenants in common, conservatorship, custodial and community property and tenants.
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Determine what type of broker you need. The three types of brokers are full service, discount, and online. A full-service broker provides insight into various stocks and provides advice on when to buy and sell. However, these brokers charge higher commissions and fees.
A discount broker does not provide any advice, but might recommend a list of securities to research. Online brokers are the least expensive. They provide charts, research documents and press releases.
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Fill out a W-8 form for tax information to send to your broker. All brokers require an up-to-date W-8 form for annual income tax purposes.
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Complete the required account application. Brokers require that all potential customers fill out an account application with basic information such as name, address and date of birth.
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Photocopy a valid ID such as a driver's license or passport. For security, brokers require proof of identification.
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Follow the directions to fund your account. Brokers typically fund accounts through a check or a bank transfer.
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