Rookie investor w/ $500 and looking for a e-brokerage firm, where do I start?

Originally Posted by LiLcHiCo4LiFe

Look into options.

Btw, I use Scottrade and TDA.
Click to expand...

Unless you have lots of money, the last thing you want to put your money into in this volatile market are options and puts.
 
Originally Posted by LiLcHiCo4LiFe

Look into options.

Btw, I use Scottrade and TDA.
Click to expand...

Unless you have lots of money, the last thing you want to put your money into in this volatile market are options and puts.
 
^^^ The amount of money you put into this is what you are going to get out to a direct correlation.

The more money you have the lower trade fee you will have. Most sites now offer $7.99 per trade which you would process in as part of the overall expense of the stock. If you are looking to make a quick buck then $500.00 is going to get you killed.

Personally I use Fidelity and Charles Schwabb but both have high minimum deposits. I would stick to Etrade or Scottrade for lower balances and I believe there fees are $7.99.

THE BIGGEST RULE I CAN STRESS - KNOW WHAT YOU ARE BUYING...make sure if you buy a fund that it isn't loaded (fees/trading fees from the fund manager/yearly calls for certain capital)

I do this for a living so if you have any specific questions feel free to shoot me a PM.
 
^^^ The amount of money you put into this is what you are going to get out to a direct correlation.

The more money you have the lower trade fee you will have. Most sites now offer $7.99 per trade which you would process in as part of the overall expense of the stock. If you are looking to make a quick buck then $500.00 is going to get you killed.

Personally I use Fidelity and Charles Schwabb but both have high minimum deposits. I would stick to Etrade or Scottrade for lower balances and I believe there fees are $7.99.

THE BIGGEST RULE I CAN STRESS - KNOW WHAT YOU ARE BUYING...make sure if you buy a fund that it isn't loaded (fees/trading fees from the fund manager/yearly calls for certain capital)

I do this for a living so if you have any specific questions feel free to shoot me a PM.
 
I came in to see what kind of "wisdom" people would have to share (Cramer? Nike? Gold and silver?) and so far this has not disappointed.

Credentials: Any given day of the week I've got six figures in play.  I'm certainly not big time - I'm a pixel in the ocean - but I have been doing this for a while so when I say this, I hope it doesn't seem like typical NikeTalk blind-leading-the-blind.

Problem: While I applaud your desire to set aside money and invest the reality is that where ever you park your $500 wad, the comission in and out is going to be about a 3% nick.  That is to say, you will have to gross 3+% just to break even on a single trade.  My suggestion?  Put the $500 toward any debt you already owe (car loan, mortgage, unsubsidized student loan, etc.). 

Explanaiton: Any debt you pay off means you don't pay interest on that portion.  If you owe money at 5-10%, you are accruing interest even as you read this.  If you put your money toward that debt, that's interest on $500 that you will not owe which is a guaranteed effective savings of 5-10% on your money.  On the other hand, you would have to make 8-13% this year to match the savings gained by using your $500 to pay off debt (because you're loosing 3+% in transaction fees). 

The stupidest thing that I encounter with some regularity is when people carry credit card balances but think they're doing it because they occasionally drop a couple hundred bucks into a brokerage account.  My lifestyle wouldn't blow your mind.  My balance sheet would.
 
I came in to see what kind of "wisdom" people would have to share (Cramer? Nike? Gold and silver?) and so far this has not disappointed.

Credentials: Any given day of the week I've got six figures in play.  I'm certainly not big time - I'm a pixel in the ocean - but I have been doing this for a while so when I say this, I hope it doesn't seem like typical NikeTalk blind-leading-the-blind.

Problem: While I applaud your desire to set aside money and invest the reality is that where ever you park your $500 wad, the comission in and out is going to be about a 3% nick.  That is to say, you will have to gross 3+% just to break even on a single trade.  My suggestion?  Put the $500 toward any debt you already owe (car loan, mortgage, unsubsidized student loan, etc.). 

Explanaiton: Any debt you pay off means you don't pay interest on that portion.  If you owe money at 5-10%, you are accruing interest even as you read this.  If you put your money toward that debt, that's interest on $500 that you will not owe which is a guaranteed effective savings of 5-10% on your money.  On the other hand, you would have to make 8-13% this year to match the savings gained by using your $500 to pay off debt (because you're loosing 3+% in transaction fees). 

The stupidest thing that I encounter with some regularity is when people carry credit card balances but think they're doing it because they occasionally drop a couple hundred bucks into a brokerage account.  My lifestyle wouldn't blow your mind.  My balance sheet would.
 
Originally Posted by Boilermaker X

I came in to see what kind of "wisdom" people would have to share (Cramer? Nike? Gold and silver?) and so far this has not disappointed.

Credentials: Any given day of the week I've got six figures in play.  I'm certainly not big time - I'm a pixel in the ocean - but I have been doing this for a while so when I say this, I hope it doesn't seem like typical NikeTalk blind-leading-the-blind.

Problem: While I applaud your desire to set aside money and invest the reality is that where ever you park your $500 wad, the comission in and out is going to be about a 3% nick.  That is to say, you will have to gross 3+% just to break even on a single trade.  My suggestion?  Put the $500 toward any debt you already owe (car loan, mortgage, unsubsidized student loan, etc.). 

Explanaiton: Any debt you pay off means you don't pay interest on that portion.  If you owe money at 5-10%, you are accruing interest even as you read this.  If you put your money toward that debt, that's interest on $500 that you will not owe which is a guaranteed effective savings of 5-10% on your money.  On the other hand, you would have to make 8-13% this year to match the savings gained by using your $500 to pay off debt (because you're loosing 3+% in transaction fees). 

The stupidest thing that I encounter with some regularity is when people carry credit card balances but think they're doing it because they occasionally drop a couple hundred bucks into a brokerage account.  My lifestyle wouldn't blow your mind.  My balance sheet would.
Click to expand...
Smart man. Balance sheet affluent, which is and should be anyone's number one financial goal. $100,000 in a brokerage with $20,000 in loans/credit card debt is not doing it big.
 
Originally Posted by Boilermaker X

I came in to see what kind of "wisdom" people would have to share (Cramer? Nike? Gold and silver?) and so far this has not disappointed.

Credentials: Any given day of the week I've got six figures in play.  I'm certainly not big time - I'm a pixel in the ocean - but I have been doing this for a while so when I say this, I hope it doesn't seem like typical NikeTalk blind-leading-the-blind.

Problem: While I applaud your desire to set aside money and invest the reality is that where ever you park your $500 wad, the comission in and out is going to be about a 3% nick.  That is to say, you will have to gross 3+% just to break even on a single trade.  My suggestion?  Put the $500 toward any debt you already owe (car loan, mortgage, unsubsidized student loan, etc.). 

Explanaiton: Any debt you pay off means you don't pay interest on that portion.  If you owe money at 5-10%, you are accruing interest even as you read this.  If you put your money toward that debt, that's interest on $500 that you will not owe which is a guaranteed effective savings of 5-10% on your money.  On the other hand, you would have to make 8-13% this year to match the savings gained by using your $500 to pay off debt (because you're loosing 3+% in transaction fees). 

The stupidest thing that I encounter with some regularity is when people carry credit card balances but think they're doing it because they occasionally drop a couple hundred bucks into a brokerage account.  My lifestyle wouldn't blow your mind.  My balance sheet would.
Click to expand...
Smart man. Balance sheet affluent, which is and should be anyone's number one financial goal. $100,000 in a brokerage with $20,000 in loans/credit card debt is not doing it big.
 
nine point five,
Most of these people are making things up, they are not investors. While I am no expert, I have worked for a stock broker for three years now and have learned a little bit about the business. $500 is a great amount to start with, don't expect to make much money, but you can become familiar with trading real money, it is much different than fake money. Fake money is good to get used to a new platform etc, or try a new style of trading, but decision making is much different with your own hard earned cash. You can use your $500 and when you feel comfortable or have more money you can add accordingly. Also, the site I personally use to trade is www.Optionshouse.com, $2.95 standard stock trades, cheapest site available, will do everything you need to do, and is also insured up to $100k i believe, so your money is safe. Etrade and Ameritrade etc may be a bit more reputable but they will be too expensive to use with $500, they generally cater to people with 25-50k+ plus and will give them cheaper rates or promotions. However, Options house has a $1000 minimum to open, with no minimum balance, so if you wanted too or had an extra $500 laying around you could open it and immediately pull $500 out. PM me if you would like more information
 
nine point five,
Most of these people are making things up, they are not investors. While I am no expert, I have worked for a stock broker for three years now and have learned a little bit about the business. $500 is a great amount to start with, don't expect to make much money, but you can become familiar with trading real money, it is much different than fake money. Fake money is good to get used to a new platform etc, or try a new style of trading, but decision making is much different with your own hard earned cash. You can use your $500 and when you feel comfortable or have more money you can add accordingly. Also, the site I personally use to trade is www.Optionshouse.com, $2.95 standard stock trades, cheapest site available, will do everything you need to do, and is also insured up to $100k i believe, so your money is safe. Etrade and Ameritrade etc may be a bit more reputable but they will be too expensive to use with $500, they generally cater to people with 25-50k+ plus and will give them cheaper rates or promotions. However, Options house has a $1000 minimum to open, with no minimum balance, so if you wanted too or had an extra $500 laying around you could open it and immediately pull $500 out. PM me if you would like more information
 
Originally Posted by Boilermaker X

I came in to see what kind of "wisdom" people would have to share (Cramer? Nike? Gold and silver?) and so far this has not disappointed.

Credentials: Any given day of the week I've got six figures in play.  I'm certainly not big time - I'm a pixel in the ocean - but I have been doing this for a while so when I say this, I hope it doesn't seem like typical NikeTalk blind-leading-the-blind.

Problem: While I applaud your desire to set aside money and invest the reality is that where ever you park your $500 wad, the comission in and out is going to be about a 3% nick.  That is to say, you will have to gross 3+% just to break even on a single trade.  My suggestion?  Put the $500 toward any debt you already owe (car loan, mortgage, unsubsidized student loan, etc.). 

Explanaiton: Any debt you pay off means you don't pay interest on that portion.  If you owe money at 5-10%, you are accruing interest even as you read this.  If you put your money toward that debt, that's interest on $500 that you will not owe which is a guaranteed effective savings of 5-10% on your money.  On the other hand, you would have to make 8-13% this year to match the savings gained by using your $500 to pay off debt (because you're loosing 3+% in transaction fees). 

The stupidest thing that I encounter with some regularity is when people carry credit card balances but think they're doing it because they occasionally drop a couple hundred bucks into a brokerage account.  My lifestyle wouldn't blow your mind.  My balance sheet would.
Click to expand...


nothing wrong with Gold and Silver. You can't go wrong in today's modern Economy. Especally starting with 500 bucks. Gold has outperformed the market in the past 12 months , and silver has outperformed Gold. If you are confident in Obamas monetary policies go ahead and dump it all in the market but if you would like to hold an asset that is older and more reliable, and is acceped on all four corners then precious metals is a good look... These ain't the 80s cats ain't making hand over fist in the market and most are losing or barely breaking even because of the volatility.
 
Originally Posted by Boilermaker X

I came in to see what kind of "wisdom" people would have to share (Cramer? Nike? Gold and silver?) and so far this has not disappointed.

Credentials: Any given day of the week I've got six figures in play.  I'm certainly not big time - I'm a pixel in the ocean - but I have been doing this for a while so when I say this, I hope it doesn't seem like typical NikeTalk blind-leading-the-blind.

Problem: While I applaud your desire to set aside money and invest the reality is that where ever you park your $500 wad, the comission in and out is going to be about a 3% nick.  That is to say, you will have to gross 3+% just to break even on a single trade.  My suggestion?  Put the $500 toward any debt you already owe (car loan, mortgage, unsubsidized student loan, etc.). 

Explanaiton: Any debt you pay off means you don't pay interest on that portion.  If you owe money at 5-10%, you are accruing interest even as you read this.  If you put your money toward that debt, that's interest on $500 that you will not owe which is a guaranteed effective savings of 5-10% on your money.  On the other hand, you would have to make 8-13% this year to match the savings gained by using your $500 to pay off debt (because you're loosing 3+% in transaction fees). 

The stupidest thing that I encounter with some regularity is when people carry credit card balances but think they're doing it because they occasionally drop a couple hundred bucks into a brokerage account.  My lifestyle wouldn't blow your mind.  My balance sheet would.
Click to expand...


nothing wrong with Gold and Silver. You can't go wrong in today's modern Economy. Especally starting with 500 bucks. Gold has outperformed the market in the past 12 months , and silver has outperformed Gold. If you are confident in Obamas monetary policies go ahead and dump it all in the market but if you would like to hold an asset that is older and more reliable, and is acceped on all four corners then precious metals is a good look... These ain't the 80s cats ain't making hand over fist in the market and most are losing or barely breaking even because of the volatility.
 
First thing's first, you always want to take liquidity, never give it.

Placing a limit order that is far above or below the NBBO is giving liquidity to the market. Market will know a trading range from idiots that do this. You'll also have institutional traders front running you if you and them think the stock is going up. Also, if they (broker) get two orders, yours (retail) and a large institutional order, and the institutional limit order is priced below yours, they'll fill your order, moving the stock lower as they fill more sell orders, and fill the institutional buy order, resulting in an almost immediate loss for you from the get go.

Placing a market order is taking liquidity, but you never know how much you'll purchase the shares for. The NBBO might be $20, but that may be from quote stuffing algos/HFT.

So, to dumb it down, always place limit orders around the NBBO. Have a price in mind, and when it reaches that price, limit order it. NEVER do a market order.

Also for all you day traders out there, pull up level II quotes out to 4 decimals. Look for subpenniers. This a lot of the time is banks and HFs frontrunning retail traders like you in anticipation of the stock going, and lack of subpennying might mean the stock's headed down.
 
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