Examples of Online Trading Companies

---

By: Anne Durrell

Online stock brokers are not easy to categorize these days. Costs, research information, and trading tools are more similar than they are different. Since it is very difficult for individual investors to beat the market, many experts recommend a buy and hold strategy with an index mutual fund. You can purchase these directly from mutual fund companies, without going through a broker. Fees for doing this are usually quite low.

When choosing an online trading company you should take into account the type of trades you are comfortable with, various online trading companies' commissions and fees, minimum amounts required to open an account, and online trading companies' policies on information security and insuring your account.

------------------------------------------------------------------------------


It is perhaps most important to consider the type of trader you are. If you execute trades often, then low commissions on trades will be important to you. If you are more of a buy and hold investor, commissions and fees won't be as important to you as other aspects, such as comprehensive customer service.

Even if you are a long-term trader with a buy and hold strategy, you should still read up on your company's commissions and fees, with an eye to less common fees, like inactivity fees and fees for closing out your account. Before you choose an online trading company, find out what their minimum is for opening or maintaining your account. While there may be a low minimum required to simply open an account, some online trading companies may only grant low commissions and offer trading tools only to those whose accounts have more than a certain threshold amount.

Before committing to one online broker, find out that broker's security policy. Do you have a guarantee that your personal information will remain private? Will your account be insured in any way? It may also be a good idea to do some basic Internet research to see if the broker has had legal trouble or if their customer service reputation is poor.

A few of the more popular online trading companies, in alphabetical order, are Ameritrade, E-trade, Schwab, and Scottrade. Ameritrade offers a flat commission of $9.99 per trade regardless of account balance or order size, and does not have a maintenance fee.

With E-trade, fees for trades vary from $7.99 to $12.99, but those opening a Power E-trade account are allowed up to 100 free trades in the first month after you open an account. Schwab will open an account with a minimum of $1,000, or with only $100, if you agree to automatically deposit $100 per month to your account. Scottrade will open a standard account with $500, or a margin account with $2,000, and has no inactivity fees or maintenance fees.

While online trading companies have many similarities, it is still worth looking at several to find a fee structure and account rules that work best for your budget and your type of trading.



Copyright 2009 Currency-Trading-Basics.com
Currency Trading Basics | Privacy Policy | Contact Us | Sitemap

Related Articles:

Google Stock Quote
Day Trading Stock Picks
Stock Market Holidays
Online Stock Trading Company
Forex Trading Training