How to Open a Trading Account

Opening a trading account is relatively easy.

Opening a trading account is relatively easy. However, deciding which brokerage firm to open a trading account with is often very difficult. Nearly all brokerage firms charge different commissions and offer different services. Ensure the brokerage firm has all the utilities you need before creating an account. Contact customer support and search online for reviews of the brokerage firm to evaluate whether the firm is right for you. The process of creating a new account from requesting an account application to having funds in your account typically takes 5 to 10 business days. For some people, not being able to trade for 5 to 10 business days means 5 to 10 business days without any income. Thus, it is essential that the brokerage firm is right for you.

Instructions

1. Request an account application from the brokerage firm. Some brokerage firms even have online applications.

2. Gather all the needed supplies to complete the account application. Nearly all brokers require a valid United States ID, such as a driver's license, in addition to a W-8 form. If you do not have a W-8 form, request one from the broker.

3. Correctly fill out the account application. Do not falsify any information on the application. The information you provide may be sent to the Internal Revenue Service (IRS) or the Securities and Exchange Commission (SEC). Falsification of any information may lead to a fine or, in some cases, jail.

4. Fax the account application to the brokerage firm or click "Send" on the online application to send the application to the brokerage firm.

5. Fund your brokerage account once your account has been created by the brokerage firm. Contact customer support if several days have passed and the brokerage firm has not contacted you on the status of your application. You are able to fund a brokerage account by faxing the brokerage firm a check, delivering cash to their office, wiring the money or through a bank transfer. For money wires and bank transfers, contact your broker to request the address and information of where to send the money.

References

• Scottrade: Opening An Account