Internet Stock Broker

Question

I am a business major in college with a background of the stock market. I have been playing around with stocks for years using programs such as up-down.com (having fake money to invest and learn). I now have $800 and some years of knowledge to play around with in the stock market.

I don't know to much about internet stock brokers but I have two question:

1) I'm looking for a cheap internet broker.. which would you suggest?

2) When they list say 5.99 per trade would it be worth getting a broker?

*(I only have $800 and if the stock I invest in is say 20.00 then the amount of fees I will be paying doesn't seem right compared to a more expensive stock... less shares & fees).

Answer 1

Scottrade is one I will recommend.  http://www.scottrade.com/investment_serv... They have $500 minimum balance requirement.

eTrade has $1000 minimum balance requirement, but a lower fee. They also rebate 12b1 fee if you ever want to buy mutual funds.

In addition to fee per stock trade, you may also want to consider charge per option contract for when you start trading options.

Best wishes.

Answer 2

Like a lot of companys internet stock brokers have to charge a fee (that's how they make their money).  Trust me, as a long time invester $5.99 is much less than what the brokers would have charged 10 years ago.  And you have to have a broker to buy stocks.

One thing to remember is that you are charged that trade fee when you buy as well as when you sell, say $12 total.  So that $20 stock would have to go up 30 cents for you to break even when you sell, as you will only be able to buy 39 shares (minus fees) with your $800.

But that can be made up if you pick a stock that pays dividents.