I saw an offer for TDAMERITRADE on TV which says they'll give you your first $100 up front. What's the catch?

Question

The trades are $9.99 each. Can I just buy $90 worth of

stock and sit on it for a while? If so, what's a good stock

to buy?

Answer 1

Here is the catch... right from their site:

Offer valid for one new individual or Joint TD AMERITRADE account opened by December 31, 2008 and funded within 30 days with $2,000 or more. To receive $100 bonus, account must be funded with $25,000 or more within 30 days of account open date. IRA and other tax-exempt accounts are not eligible to receive the $100 cash bonus. Offer is not transferable and not valid with internal transfers, accounts using the Amerivest service, accounts managed by independent investment advisors and maintained by TD AMERITRADE Institutional, current TD AMERITRADE accounts or with other offers.

Answer 2

E-rock is correct.

here is how the discount brokers make money.

It's surely not 9.95 a trade.

They are market makers where they make money on the spread - the buy and sell. Hint, it's a heck of a lot more than $9.95, but you only see $9.95 for your commission.

I came up with this back in in later 90's when these on-line discount firms began popping up.

Odds are you will also loose more than $100 plus $9.95 twice on anything you buy long right now.

Answer 3

Brokers give free trades all the time to get people to sign up. It's just an incentive.