JULY 31: Discount online stock trading for beginners

by David Jenyns on July 31, 2006

TDAmeritrade and E*trade are discount online stock trading brokers. There are as many discount online stock trading brokers as there are dollar stores in America today. Weíre familiar with the big dogs like TDAmeritrade. For example, for a $2000 minimum deposit, you can open an online stock trading account and only pay $9.99 per trade with no monthly fees. Thatís not bad as all the others Iíve seen are higher and then some do have monthly fees as well.

You might want to check the fine print on that $2000 deposit though to see if there is a penalty if your deposit falls below a certain amount. You want to be aware of all the fees up front. Other discount online stock trading companies penalize you if you donít make a certain amount of trades each month. Again, read the fine print.

If it sounds too good to be true, it probably is. Since 2002, the SEC has announced action taken in almost 50 internet related stock trading scams. Now its one thing to look for the best deal among recognized discount online stock trading brokerage companies, but its another thing entirely to fall for one of these internet scams. Be especially wary of unsolicited email and message boards ďtalking up a stock.Ē Donít pay any attention to such hype as it might just be the latest scam artist after your money.

At investingonline.org, youíll find a comprehensive resource center created by the North American Securities Administrators Association. The Investing Online Resource Center was created in 1999 with the sole purpose of aiding the individual online investor through education and training. They have an online simulator so you can see what its like to trade online before you part with any money.

They have advice and articles about discount online stock trading and there are independent links that you might find interesting on online stock trading and discount online stock trading companies. They do not endorse these companies; they just provide the links to ratings of the companies. I clicked on smartmoney.com and there is an article rating some of the different discount online stock trading companies.

Some view online stock trading as silly and others would have it no other way now that they are used to it. I personally enjoy tracking my stocks online and deciding when to buy and sell by the information I find, but Iím not dealing with big money either. As with any other venture, before you turn your hard earned money over to any discount online stock trading company, do your homework and research extensively so that you can make an informed decision.

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