Thinking of Opening an ETrade Acct - Advice?

[surfinillini]

Thinking of deposting 1K into Etrade and dabbling a little bit...is this a good place to start or should I use a different site?

Any general advice would be helpful

[eastbay]

[ QUOTE ]
Thinking of deposting 1K into Etrade and dabbling a little bit...is this a good place to start or should I use a different site?

Any general advice would be helpful

[/ QUOTE ]

I think an ETrade commish is $12.95 or something like that. So if you go in w/ your $1k and buy five stocks, you just started 6.5% in the hole. Even if you just held all year you'd have to get decent returns just to break even. If you wanted to turn over every 6 months now you'd have to do really well just to break even.

IMO you'll get as much or more out of paper trading than trying to invest or trade $1k in stocks.

While you're paper trading, turn your $1k in $20k playing poker. Then start with that.

eastbay

[GME]

It depends what you are thinking of trading. If you are looking to trade stocks this is fine, but if you want to mess around with options you will need to deposit substantially more.

[surfinillini]

[ QUOTE ]
It depends what you are thinking of trading. If you are looking to trade stocks this is fine, but if you want to mess around with options you will need to deposit substantially more.

[/ QUOTE ]

stocks only, and not too expensive ones either

[Dazarath]

It's not really the price of the stocks that eastbay was worrying about. It's the commissions in relation to your starting bankroll. Everytime you make a purchase, you're paying 1+% of your bankroll. If you make small purchases, let's say 4 shares of a $50 stock, then you're paying $13 on a $200 purchase. $26 total, after you sell. So just to breakeven, you'd need to get returns of 13%. And most people planning to dabble, aren't going to be holding some 4 share purchase for 2 years. So it's unlikely that you'll make that 13% on average.

[erby]

what about small cap no-load mutual funds?

ERBY [img]/images/graemlins/spade.gif[/img]

[surfinillini]

[ QUOTE ]
It's not really the price of the stocks that eastbay was worrying about. It's the commissions in relation to your starting bankroll. Everytime you make a purchase, you're paying 1+% of your bankroll. If you make small purchases, let's say 4 shares of a $50 stock, then you're paying $13 on a $200 purchase. $26 total, after you sell. So just to breakeven, you'd need to get returns of 13%. And most people planning to dabble, aren't going to be holding some 4 share purchase for 2 years. So it's unlikely that you'll make that 13% on average.

[/ QUOTE ]

but if I sign up I think I get 100 free trades

[Dazarath]

Oh, well in that case, I guess 1k is ok to "dabble" with.

[surfinillini]

[ QUOTE ]
Oh, well in that case, I guess 1k is ok to "dabble" with.

[/ QUOTE ]

any sites with lower commissions, like around $5, what about ameritrade.

I want to sign up somewhere that other people can recommend, not just look at their website.

[Dazarath]

Ameritrade Izone offers $5 trades, but it's a 5k minimum. BrownCo offers $5 trades too, but I don't know what their minimums are. Scottrade offers $7 trades with either a $0 or $500 minimum (can't remember). I can't really offer recommendations, because I use Fidelity personally.

But it seems like people on this board usually recommend Scottrade for people who want to invest in stocks, and Vanguard for people who want to invest in mutual funds, or for Roth IRAs. Some people have mentioned though, that you can't deposit into a Scottrade account online or something. Maybe it's just the initial deposit. You should check up on that first. Oh, Ameritrade Izone doesn't allow the first deposit to be ACH. It has to be wire, or a check. They have some stupid rule where you can't make an ACH deposit > your current account balance, so with an initial balance of $0, oops sorry. Pretty pointless rule if you ask me.