Start the conversation
The first step to learning how to investing is knowing how to open a brokerage account. This course shows you how to choose the right account for you and how you can open one today. But that’s not all. Once you open an account, you need to know how to use it to buy and sell stocks. We’ve got you covered there too.
Not only will you learn how to buy and sell stocks, but we’ll show you how to use your brokerage’s tools to minimize risk and maximize gains.
Before you start buying and selling stocks, you’ll need to open a brokerage account. We’ll show you exactly how to do it here, step by step.
There are dozens of companies that can provide you with brokerage services, so finding the right one to suit your needs may seem daunting.
Don’t worry – we’ve made it easy to figure out which one you need. You’ll be able to set up your account and begin buying stocks in as fast as 30 minutes.
To get an account set up, there are just three easy steps to take to get started:
Step 1 – Select your broker: You could look them up online, or simply use the criteria we provide below.
Step 2 – Set up your account: You can do this over the phone using the numbers below or on the broker’s site, or just do it all online.
Step 3 – Fund your account: You can simply transfer money from a checking or savings account by providing the account number and routing number.
To help you with broker selections, we’ve listed a few of the firms with the lowest account minimums and commission fees, without compromising on quality customer service. Listed below are the top discount brokers around.
|Broker||Contact||Types of Trades||Minimums to Open||Pricing|
|Robinhood||robinhood.com Online Only||Stocks, ETFs, options, cryptocurrencies||None[DP1]||None|
|Stocks, ETFs, options, futures, mutual funds, bonds||$500.00||Stocks: $5.00, options: $5.00 + $0.50 per contract.|
|Charles Schwab|| schwab.com|
|Mutual funds, ETFs, CDs/money market, domestic and international stocks, bonds, options, futures||$1,000.00||Stocks & ETFs: $4.95 + $5.00-$25.00 service charge. Options: $4.95 + $0.65 per contract + $5.00 service charge.|
|Mutual funds, IRAs, stocks, bonds, ETFs, and options||$0, or $4.95 for options||All online U.S. equity trades: $4.95. Options: $4.95 per trade + $0.65 per contract.|
|TD Ameritrade|| tdameritrade.com|
|Stocks, options, mutual funds, and futures||$0, or $2,000.00 for Margin or option privileges|| Stocks and ETFs: $6.95. Options: |
$6.95 + $0.75/contract.
Disclaimer: Neither Money Morning nor Money Map Press is a broker, dealer, or licensed investment advisor. The author should not be considered as permitted to engage in rendering personalized investment, legal, or other professional advice as an agent of Money Map Press. Money Map Press does not receive any compensation for these services. Additionally, any individual services rendered to Money Map Press by the companies listed are considered completely separate from and outside the scope of services offered by Money Map Press. Any contact and resulting relationship is strictly between you and the company.
The brokers we’ve chosen here are called “discount brokers” because they are less expensive than full-service brokers.
Full-service brokers can sometimes charge hundreds of dollars for their services. They can also charge you an annual percentage of your portfolio – so the more you make, the more you pay.
You should use whichever brokerage platform is right for you. The discount brokers listed above might meet your investment needs for a fraction of the full-service cost. If you prefer full service, then by all means go that route.
Once you decide on a broker, you’ll need to set up your account.
Most brokers allow you to set up an account over the phone or on their webpage, whichever you’re more comfortable with.
You’ll be asked to provide personal information – typically your contact information, employment status, annual income, and approximate net worth.
You’ll also be asked to select between several account types, as well as what you’d like to trade. You might see a screen like this:
Picture taken from TradeStation.com
These prompts will vary from broker to broker, so it’s best to contact the brokerage itself with any questions. While we can’t advise you on what account to open, individual cash accounts are the most common. You’ll want to choose “equities” to buy and sell stocks.
You’ll start out with a standard equity account. That will allow you to buy and sell stocks. But as you become more experienced over time, additional account types will be available to you.
Anyone planning to be an active investor/trader will want to eventually request access to as many different trading styles as possible. In most cases, it’s best to have options available to you. But just to get started with buying and selling stocks, you don’t need to do anything beyond equities at first.
Here’s a quick overview of the other accounts you can eventually open:
- Options trading is usually the next step for investors. Now, you don’t need to open a second account. Instead, your broker will give you access to their options platform. This lets you buy and sell options contracts, which are the rights to buy or sell stock at a certain price by a certain date. You don’t have to exercise your options contracts; you can buy and sell them as their own assets. Options trading can be a very profitable addition to your investing portfolio.
- You also may be given the option to open a margin account. Margin trading is when an investor borrows money from their broker to purchase stocks. This is only available to investors who have demonstrated to their broker that they can repay any debt they take on. You’ll have to provide your broker with more information on your net worth and financial history.
- Finally, you can also eventually open a futures trading account. A futures contract is an agreement between you and the broker that allows you to buy or sell an asset at a future date and mutually agreed-upon price. These are mostly used for commodities. Let’s say a futures contract for oil (1,000 barrels) is trading at $60 per barrel. If you’re bullish and think the price of oil will climb before the contract expires, you will buy the contract and pay whatever fees the broker imposes. If the price of oil climbs to $65, you can sell the contract, and you’ll profit $5 per barrel. However, if the price drops to $55, you’ll owe that $5 difference to your broker.
Again, these are all “add-ons” you can access at a later date. If you just want to start off by buying and selling stocks, you can stick with the standard equity account and revisit these other accounts later.
Once you’ve added money to your brokerage account, you’re ready to start buying stocks.