Online Stock Trading Tutorial

Lower your costs with an online broker.

If you are comfortable doing your own research and making your own investment decisions, you can save a lot of money on your stock trades by opting for an online discount broker instead of a full-service one. Online discount brokers offer trades for as little as $7 each, letting you keep more money in your pocket and maximizing your investment return. Once the account is open, all you need to do is log on, choose the stocks you want to buy and confirm your trade.

Instructions

1. Choose the online broker that best meets your needs. When choosing an online broker, it pays to look at a number of factors, including the minimum balance required to open an account, the cost of each trade and the level of satisfaction existing customers report. You can find ratings of online brokers in financial publications like the Wall Street Journal and Barron's, and at financial websites like CNN Money and Yahoo! Finance.

2. Fund your account with the amount you want to invest. Send your completed brokerage application, along with your check, to the address listed on the form. Some brokers allow you to open your account online and fund it with a direct transfer from your bank account, so that is an option as well.

3. Log on to your account and go to the trading menu. Enter the ticker symbol of the stock you wish to purchase, along with the number of shares you plan to buy. You can find the ticker symbols at financial websites like Yahoo! Finance and CNN Money, or on the brokerage site.

4. Click the "Preview" or "Confirm" button to review the details of your trade. Make sure you have enough cash in your account to cover the cost of the stock purchase and the commission. Click "Confirm" to send your order for processing.

5. Print a copy of your trade confirmation and keep it with your tax records. You will need this documentation to determine the capital gain or loss on the stock when you sell it.

References

• E*Trade: Online Investing