Anyone have an online trading account? If so, who do you recommend?

[Harold Mansfield]

Let me start off by saying, "No, I don't really got it like that", but I have blown more than a few hundred here in there through out last year on stuff that I didn't really need and it all adds up to a few grand that I probably could have used for something else.

Been eyeballing a few stocks lately and I think I'd like to get involved before the economy picks up.

Was wondering if anyone here has an account with any of the online brokerages and which you like?
Reasonable fees, minimum trades and such.
And any other tips you can give for a first timer thinking of getting involved.
Thanks

[Spider]

I use Ameritrade and strongly recommend them. I have heard that Scottt Trade is good, too. Don't know much about any of the others. If you decide to use Ameritrade, let me introduce you - I think I get a few free trades, or something.

Online Trading - TD Ameritrade - Online Stock Trading Online Investing (http://www.tdameritrade.com/)
Online Trading and Online Investing – Online Brokerage Scottrade (http://www.scottrade.com/)


BTW - Remember the stock market anticipates the economy so while you are thinking the economy will pick up soon, investors have been thinking that for some time and have already bid prices up. The Dow is at two-years highs currently having gone up some 30% I think since Obama took office.

[Evan]

I've used TD Ameritrade, E*TRADE, Charles Schwab, and ING/Sharebuilder. I now use Schwab and Sharebuilder. If you want to make infrequent trades, Sharebuilder has a nice "auto invest" feature where you can buy at a reduced cost. So instead of spending $7-9 per trade (common with all the others), you spend $4, but it trades only on Tuesday. That's good if you're not wanting to regularly invest.

Keep in mind with every sale, if this is in a taxable account, you will have a taxable transaction that needs to be reported on your individual tax return. A lot of people tend to go wild and have hundreds of buy/sells in a year, and their tax return begins to cost a fortune. :)

[vangogh]

Evan ING and Sharebuilder are the same then? I have a checking account with ING so I'm guessing it would be easiest for me to set up a trading account with them.

Frederick what is it you like about Ameritrade?

I'm in the same boat as Harold. I can't say I have tons to invest, but I have a little and would like to get into the market a bit to test the waters.

[Spider]

I like Ameritrade for the convenience, the speed of transactions, the intuitive process (nothing to learn), the recordkeeping, the stock information (although I supplement individual stock charts using BigCharts at Marketwatch), streaming prices, monthly paper statement. I have only once had to use the telephone and the broker I dealt with was helpful and knowledgeable.

[vangogh]

Thanks. Sounds as though you like the entire experience with them. Good to know.

[craigb]

I have used Etrade now and then. I dont really go for the stocks and bonds thing i have to many bills and what not to be bidding on other companies.

but with the CEO at Apple being sick and the stock dipping it might be a good time to pick up a few seeds from the ol apple tree before it grows again lol

[Harold Mansfield]

I like Ameritrade for the convenience, the speed of transactions, the intuitive process (nothing to learn), the recordkeeping, the stock information (although I supplement individual stock charts using BigCharts at Marketwatch), streaming prices, monthly paper statement. I have only once had to use the telephone and the broker I dealt with was helpful and knowledgeable.

That all sounds intuitive and pretty idiot proof. Which is definitely right up my alley.
I'm curious, if you do need to call, is the service the same for everyone? Will a guy with $2k get the same treatment as the guy with a 6 figure account?

And the taxes. I didn't even think about that. Do you only pay on gains? Is it per trade? How does that work?

[Spider]

1. I am one guy with the portfolio I have and the service is always the same for me. I don't need to worry about what the service is like for other people. That said, I know of no reason why the service would be different. Besides, if you trade your $2,000 twice a year, you generate no more income for Ameritrade than the fellow with $10 million trading his portfolio twice a year. The fees are per trade, $9.95, regardless of the amount.

2. Yes, you pay income tax on your gains. At the end of each year, they send you a 1099 (just like any other 1099, with which you are probably familiar - one copy sent to you, one copy sent to the IRS.) Up until now, the 1099 showed your income from stock transactions. That would be dividends received and proceeds of stock sales. But the stock sales are of stock you purchased - at a cost. That cost is not deducted from the proceeds - because the IRS didn't ask for that information, so you had to do the calculation - proceeds minus cost - to determine taxable gain. You did that on Schedule D of your 1040. It's a simple enough form, except that if you do much trading during the course of the year, your Sch.D will have lots of lines on it. The net proceeds (your net profit) is carried to the appropriate box on your 1040.

I used the past tense because the IRS is now requiring that the cost of the sold stock is also reported. I think that begins for 2011 tax year. That's better because now your net income from stocks can be calculated directly from the 1099 and would only need a single line entry on the Schedule D per the 1099, I presume. In any case, it's not at all difficult. All the information you need is available online in your Ameritrade accouunt.

Does that answer your questions? Fire away if you have more.

[Harold Mansfield]

if you trade your $2,000 twice a year, you generate no more income for Ameritrade than the fellow with $10 million trading his portfolio twice a year. The fees are per trade, $9.95, regardless of the amount.
Ah! OK, I see. They only make per trade and not a commission like a broker. I did think that but wasn't sure.


2. Yes, you pay income tax on your gains. At the end of each year, they send you a 1099 (just like any other 1099, with which you are probably familiar - one copy sent to you, one copy sent to the IRS.) Up until now, the 1099 showed your income from stock transactions. That would be dividends received and proceeds of stock sales. But the stock sales are of stock you purchased - at a cost. That cost is not deducted from the proceeds - because the IRS didn't ask for that information, so you had to do the calculation - proceeds minus cost - to determine taxable gain. You did that on Schedule D of your 1040. It's a simple enough form, except that if you do much trading during the course of the year, your Sch.D will have lots of lines on it. The net proceeds (your net profit) is carried to the appropriate box on your 1040.

I used the past tense because the IRS is now requiring that the cost of the sold stock is also reported. I think that begins for 2011 tax year. That's better because now your net income from stocks can be calculated directly from the 1099 and would only need a single line entry on the Schedule D per the 1099, I presume. In any case, it's not at all difficult. All the information you need is available online in your Ameritrade accouunt.

Does that answer your questions? Fire away if you have more.
Nope. That cleared up a lot. Doesn't seem as difficult as I thought it would be. It's almost like gambling income.

[Spider]

Ah! OK, I see. They only make per trade and not a commission like a broker.I'm not sure that many stockbrokers still charge a share fee. When I started, there was a trannsaction fee + a few cents per share. That is you bought 100 shares of XYZ, the cost might be $20 transaction fee + 2 cents per share = $22. Buy 1,000 shares and the cost would have been $40. Now, it's $9.95 (or whatever the online broker's fees are) whether it is 100 shares, 1,000 shares or a million shares. But don't let me mislead you, you are likely to have fewer transactions per year with your $2,000 (or whatever), than the person with a million dollar portfolio.



Nope. That cleared up a lot. Doesn't seem as difficult as I thought it would be. It's almost like gambling income.I hope you mean the tax process is the same as the tax process with gambling income. Please don't look upon stockmarket investing as gambling. Sure, you can use it to gamble, but investing is a different concept entirely.

[Harold Mansfield]

I hope you mean the tax process is the same as the tax process with gambling income. Please don't look upon stockmarket investing as gambling. Sure, you can use it to gamble, but investing is a different concept entirely.

Yes, I mean as in taxes. Out here any one time winning over $1199 get's the same type of form, and if you gamble regularly you can get a print out of your play for the year. Combined with ATM receipts, somehow they come up with winnings and losses for the year. I don't exactly remember how it goes anymore, but it sounds familiar.

[raineysky]

I have been trading online since the 90's and have used TD Waterhouse, TD Ameritrade, and Scottrade. Still use the latter two and have to say Scottrade is the best one. The commissions are lower, trade execution is about the same, and you can get your money from them a little faster when you need it.