Question: Basic Stock Market Questions?
I was wondering if it cost monthly to have Stock?
Can I have stock without a stockbroker?
What are the advantages of a broker?
Where is a good place to go to do online stock for beginners?
If a stock asks for a $500 deposit I am able to get this fully back right? (isn't it like a bank account where sometimes you need a certain amount of money deposited in order to open the account?)
How often can I buy and sell stock? (daily, hourly, secondly) And does it cost a fee to buy or sell my stock?
Thank you so much for answering any of my Questions. :)
Answer:
READ: Stock Investing For Dummies
Your questions are good ones... but the answers are in some Basic education. Read a few books before you open an online brokerage account.
1) If you own stock directly, no. If you own stock through a fund, there will be some management fee. But you won't see this directly; it will be reflected in a lower share price.
2) I suppose it might be possible; but I don't know of any practical way for an individual investor to do so.
3) Provides information about stocks and funds. Manages your money. Executes transactions, often with guarantees on speed and best price available. Explains the workings of the Market.
4) Just about major company should provide information for beginners. If you'd like specific names... Fidelity, E-trade, Scott-trade. Large banks will also often provide brokerage services.
5) I've never heard of a stock asking for a deposit. Funds however may have a minimum investment amount and a minimum amount of time you must stay in the fund.
6a) Legally, you may buy and sell as often as you wish. However, brokerage companies will often impose de facto limits by for instance declaring money from a stock you sell as "unsettled" for 1-3 business days after selling, and allowing only settled money to be used for buying and selling further stocks.
6b) Legally, the SEC (Securities and Exchange Commission) charges a 0.00169% fee on all sales of stocks. So for instance, if you sell $10,000 worth of stock, you pay a 16.9 cent fee. I don't know of any fee for buying stock. In addition to the SEC fee, brokers often also charge fees for buying and selling stocks. For instance, Fidelity charges $7.95 each time you buy, and $7.95 each time you sell. However, some brokerages reduce or waive these fees for large or super-large balances, or if you make a certain number of trades per year (some reward frequent trades, others reward infrequent trades).
EDIT: I guess I was wrong about answer 6a. See next answer.
It does not cost anything monthly to own a stock and indeed some stocks will pay dividends (a share of the profit) to you every three months.
You can own stock without a stockbroker but you have to receive it directly from the company, usually as part of an employee purchase program. The best thing to do if you get stock directly from a company is to request that the share certificate be issued and take that to your broker and deposit it into your account.
A stock broker can sell or buy stocks on your behalf at exchanges that he has a membership to. It's sort of like buying and selling on an eBay where only the brokers are allowed to go to.
Most of the discount brokers are pretty good. The Internet only ones like e-trade have the lowest commissions and ones such as Fidelity have a lot of local offices for you to drop by and talk to real people.
The stocks don't require a deposit but a brokerage house works like a bank account and may require you to make a deposit.
The SEC has rules about what qualifies as a pattern trader and requires pattern traders to keep more money in their account. Generally if you don't trade in the same stock more than three times a week, you're fine. Keep in mind that it takes 3 to 4 days for a trade to settle. That is when you buy a stock, the seller has 3 to 4 days to deliver the stock to you so you may not actually have it in your account for a few days likewise when you buy a stock, you may not actually have the money for 3 to 4 days. You pay your stock broker a commission every time you make a trade whether it's buying or selling.