I have about $1,000 that I’m looking to play with in the stock market. I’m looking to find out what is the best online stock broker that I can sign up for. I’m not looking for long term investments, or any “help” per se, as much as I am looking for a way to play with $1,000 that I can do from the comfort of my own home, with a possibility of actually gaining some money.
There are a bunch of online brokers that I can sign up for, but don’t know which might be best for my purposes, or how to compare them. Figured I would ask the people on the SDMB who I’m sure have some experience.
A lot depends upon what kind of stocks you plan on purchasing, and how frequently you’re looking at trading. Some online brokers don’t support DRIP investing, so you end up waiting to accumulate enough dividends to make a purchase feasible. If you plan to purchase mutual funds Vanguard works great, but for individual stocks not so much. Sharebuilder is easy to use, has research included, and is good for automatic investing. I put stocks for my grandbaby in there.
I trade on Chase, which is the only one my 401k self directed account supports. That’s the only reason I trade there, if that tells you anything about it. $14.95 a trade. What a load of crap.
I don’t know what type of stocks I’ll be buying, I assume they all have the major exchanges, I don’t know if I’ll do penny stocks, but if it is a problem then I’ll say no. I want to actually “play” on the market, so figure I’d do a bunch of trades, only holding something for a few days or weeks (possibly)… So a low trade cost would be good.
This money is to play with, and get my feet wet… If I could get away for a weekend, I’d probably go to a casino instead
I’ve used TD Ameritrade for many years and have no complaints.
I’d caution against a lot of “playing” if you’re only going to invest $1000. Even at discount brokerages you’re still looking at paying around 10 bucks a trade. That will eat into your return if you trade a lot.
Vanguard doesn’t work great for frequent traders because they give you 25 $4.00 trades per year, then raise the price to $20.00 a trade. Sharebuilder charges $6.95 a trade and doesn’t have a minimum balance requirement. Of course, once you have a $50,000 account everybody charges less, but it’ll probably take you months to build that up starting at $1,000.
Yeah, but I know that the ones who fall for it are first-class suckers. Kind of weeds out the skeptics. How about this for a slogan; “You’re not the kind of person who presses charges, are you?”
Yeah, at $1000 total funds and you ‘playing’ the market, really the biggest priority should be lowest cost trades, otherwise you’re going to eat into that really quick. Even at $5/trade that’s only 100 buy/sell trades.
The cost per a trade listed, is that a buy and sell, or a buy or sell? So for a site that has a $5flight trade (for example) do I have to make $5 or $10a to break even?
The commission is for one trade. That is, a buy. Or a sell. If you buy stock, then sell it, that’s two trades. And two commissions.
Oh and if you’re “playing” with very low funds, Interactive Brokers (www.interactivebrokers.com) is the way to go. Their flat rate is $0.005 per share, with a minimum of $1, and not greater than 0.5% of the total value of the trade. So, for a $1000 account, you obviously (at start) won’t go over $5 commission, and usually will probably be charged the $1, unless you’re “playing” with penny stocks (don’t). And it’s a pretty good brokerage (if you don’t need much handholding).
I’ve personally used TDAmeritrade, Fidelity, and Sharebuilder. Of those TDAmeritrade is the best platform as far as being able to trade the most things, and making finding them easy. Sharebuilder was easily the worst, in terms of how good the website is. I also dislike sharebuilder because there are so many fewer options. IE, on TDAmeritrade you can easily trade stocks, individual bonds, cds, and options. On sharebuilder there are no CD or individual bonds available, period.
I’m not sure shat you mean by a individual bond options, but you can buy and sell options on Sharebuilder, not that a new investor should be worrying about that anyways.
Also, you kinda lumped CDs into that statement, if that’s the same as just investing in CDs (like the CDs I’m thinking of), you can get them through ING (now CapitalOne360). You should have an account with them anyways if you’re going to use Sharebuilder. It’s the only way to electronically get money into your Sharebuilder account for free.
Yeah, I edited that out, I mean individual bond choices. Just being able to pick one CD, from one bank, and having to open a separate account to do so, is not the same as being able to pick from any CD available on the open market, many at higher interest rates or different durations than are available from Capital one 360. On my TD Ameritrade account I have in the past purchased things like 30 year callable CDs, Fannie mae zero coupon bonds (strips), etc that are completely unavailable on Sharebuilder. But a bigger issue is that the biggest killer of your performance that you are 100% in control of is fees and commissions, and if you can’t buy individual bonds then you are forced into “bond funds” or “target date funds” if you don’t want 100% stocks, and those have fees.
Since I didn’t understand a lot of that, I’m going to wager that, while I understand what you’re saying, a lot of it is irrelevant to the new investor that wants to throw a grand at the market and wants to juggle 5 or 10 companies, making a few trades a week.
Or course, with a grand, it’s going to be more like carefully picking two and sitting on them for a few months, making just a few trades a year*. I started with a grand of my own money. It quickly moved up to about 6 grand of my own money, just because that’s what it took to actually be able to really play around. Even that means only about 20 very carefully thought out trades a year, maybe 30.
*I learned very quickly that if you don’t buy enough, sure that’s not much risk, but there might actually not be enough reward to over come the commission. So, you buy $100 of a stock. If the commission is $6.95, you have to get that stock up to $113.90, almost 14%, just to break even. Short of them putting out a great earnings report, that’s not going to happen overnight. If you buy $1000, that $13.90 is closer to 1%.
As others point out, “playing” with just $1000 may not get you far. At the end of a year of stock trading you might have $100 gross profit less $60 fees and other possible inconveniences. I’d instead consider put and call options to get some leverage and excitement – at least if you’re not worried about blowing the whole grand.
That’s achieved with just 8.1% net annual appreciation. (Google “1.081^50”.) Admittedly, even 8.1% may be optimistic given present-day malaise and uncertainties.
