Newb Question - Buying a stock 101

[PatInTheHat]

I was wondering if anyone would mind telling me what is the easiest/cheapest way for me to purchase a specific stock, preferably online.

[gull]

Set up an account at one of many online discount brokerages. Zecco is the cheapest; its trades are commission-free. If you don't trust the new, purely online brokerages, then you could try Scottrade. They have branches all across the US, and they charge $7 per trade. If you want a referral, PM me (we'd each get 3 free trades). SogoInvest is another cheap brokerage; it has $3 trades.

[sunnypoker]

I've read the T&Cs and stuff in Zecco and since I'm a noob too i seem to have hard time understanding.

what sort of fees are there? surely there must be some hidden fees.
if all I want to do is buy shares in relatively big companies and sell it later on. (for example NASDAQ or FTSE stocks) what sort of feess will I be paying?

Is there fees for depositing/withdrawing money from the brokerage site?

[Sniper]

gull, you should not be recommending to anyone that needs handholding, that they should setup an account at Zecco.

[AvivaSimplex]

I've never used Zecco, but Scottrade is good. A brokerage account is like a bank account, except with more options about what you can do with the money you deposit. There are no fees for depositing or withdrawing. Scottrade will send you a checkbook to let you draw on your account.

Basically, you fill out the forms on their website, and mail in those with a check. In a couple weeks, your account will be set up and you can start. Trading is simple, you just log in, click trading, click Buy, and decide what price to offer on the stock you want. After the trade goes through, Scottrade will subtract the cost of the trade plus $7 from your balance, and you'll see the stock in your portfolio.

Various other brokerages may charge some hidden fees (like $100 if you ever want to transfer your account to a different brokerage). I like Scottrade because they're very good about keeping customer costs low.

[nostradumass]

Pat, what is your goal? Are you going to be trading in and out? How much money are you using? Don't answer these here because it is none of our business, but what are you intending to do?

Day trade? Invest (buy and hold)? Buy something going into earnings? Short sell? Options?

Most firms won't let you short unless you have extensive experience in the markets because of the risk.

Scott and Brown are both cheap and your money would be safe with them. No hidden charges outside of the commission they charge and you can usually get your money by writing a check, unless it is margined against a position and then you would have to close a position that would cover your check.

If you are buying 10 shares of something and pay $7 it has to move $1.40 in your favor before you are break even. If you buy 5000 share it only has to move $.02 before you are good.

Do some more homework and good luck.

Recommend you use limit orders instead of market orders too. Good luck and be sure to do your homework. Trading is not a "get rich quick" plan like so many people think.

[PatInTheHat]

[ QUOTE ]
Pat, what is your goal? Are you going to be trading in and out? How much money are you using? Don't answer these here because it is none of our business, but what are you intending to do?

Day trade? Invest (buy and hold)? Buy something going into earnings? Short sell? Options?

Most firms won't let you short unless you have extensive experience in the markets because of the risk.

Scott and Brown are both cheap and your money would be safe with them. No hidden charges outside of the commission they charge and you can usually get your money by writing a check, unless it is margined against a position and then you would have to close a position that would cover your check.

If you are buying 10 shares of something and pay $7 it has to move $1.40 in your favor before you are break even. If you buy 5000 share it only has to move $.02 before you are good.

Do some more homework and good luck.

Recommend you use limit orders instead of market orders too. Good luck and be sure to do your homework. Trading is not a "get rich quick" plan like so many people think.

[/ QUOTE ]

I want to buy a large volume of a specific stock that I will be holding onto for 1-2 years. After this first one I may start buying into others.

Basically im just looking for a easy low cost method to do this.

[Sand]

One trade? Take gull up on his offer and go with ScottTrade. With only one trade the transactions costs are not something that really matters.

[nostradumass]

i concur with sand... the cost should be less than $10 for up to 5000 shares. ScottTrade and Brown are about the same. Be sure to get check writing privliges.

[PatInTheHat]

I should also mention im in Canada. Not sure if that effects this.