For stock marketing, what kind of Account(s) should I open?

Question

to be able to do all kinds of stock marketing such as

Buying/Selling, selling short and buying to cover/margins...

Thanks

Answer 1

The term would be trading. :) But you can go to http://www.ameritrade.com or http://www.sharebuilder.com. There's also ScottTrade, eTrade, Charles Schwab. Shop around for the best fees and services that would closest match your investment needs. For example, if you are considering short selling and/or margin trading checking out the rates between the various houses would be a good idea.

http://www.myspace.com/jimbauer601

Answer 2

A brokerage account

Answer 3

A regular brokerage account (cash account) will entitle you to buy and sell securities.

When you are opening the account you notify the firm that you also want to sign a margin agreement.   If approved the margin account will be attached to you cash account.

It is actually all one account but there are suffix codes that distinguishes the type of accounts (cash,margin,short, arbitrage, not purpose loan etc)

Answer 4

A normal "brokerage" account will enable you to buy and sell securities.  

"Margin" account qualification is similar to a bank loan application ... therefore, once you have sufficient capital invested in a brokerage, they will loan you money on "margin".

The shares you purchased normally (not a "margin" buy) will be viewed as collateral (for the margin buy) by the brokerage firm.  If those shares lose value, you may be asked to deposit more money - or sell some of the shares bought "on margin" to return your collateral to the brokerages required percentage.

Margin purchases or "shares bought on margin" require a percentage of actual investment ... such as 20% ... meaning you must actually pay for 20% - then buy the remaining 80% "on margin".  The margin is like a loan ... you are paying the brokerage firm interest every month - regardless of how those shares are gaining or losing value.  You are borrowing money to buy shares - and you must pay interest on that loan.  You also must maintain sufficient assets in that brokerage to pay the entire loan at all times!  Think about that ... you may be denied the ability to withdraw your money because it is collateral for a margin purchase that has lost value plus you are paying interest on that loan every month!!!

Selling "short" is also a loan ... that is, you are selling stock today that you commit to purchase in the future.   You obviously believe the stock will lose value - so you can buy it in the future for less than it is worth today.  If it goes up, instead, you lose ... and, as it goes up, the brokerage will ask for more capital as collateral.

My recommendation is to start with a simple brokerage account ... buy/sell "long" positions (you buy now - sell later) ... and when you have invested successfully for many years, consider margin accounts, short selling, etc.

Good Luck ...

Answer 5

In order to invest in the stock market, you will need a brokerage account.  There are two types of brokerage accounts: full-service and discount.  Full-service brokers tend to charge more but they give you advice and guidance.  Online discount brokers are cheaper but they expect you to make your own decisions.

I've never used a full-service broker before.  I've always stuck with online discount brokers because they are cheaper.  Plus, I like to do my own research and make my own trading decisions.  A regular account at a brokerage firm will allow you to buy, sell, sell short, and buy to cover.  If you are interested in buying on margin, you will have to open a margin account which will usually require approval from the broker.

Currently I have an account with Firstrade http://www.firstrade.com/.  I would definitely recommend it to beginner investors because of their easy to use interface.  Commission is $6.95 per trade and there are no maintenance or inactivity fees.  Be sure to check them out.

Answer 6

You can do all that in a brokerage account or IRA if you specified your account goals.  What you do depends a lot on your situation.  The market is more work that you probably imagine, especially when it comes to trading profitably, and there will come a time when you realize that investing forums will help you little if at all.  You may want to peruse all the questions I've asked on this forum about investing.  There are probably about 150 of them in a mass of 300 or so totals.  Otherwise, get going on investopedia.com, thismatter.com, and all the print you can get your hands on.

Good luck.