Enter the complicated world of brokery


A Beginners Guide To Trading Stock Online

Beginners  Guide  To  Trading  OnlineBy having an account online, it allows you to
buy or sell shares automatically ( i.e.
So  You  Want  To  Buy  Or  Trade  Shares?without human intervention in the most part
). Once you place an order to buy or sell,
The first thing you need to do if you areyou normally have a limited amount of time to
online, is check out online brokers such asaccept  or  turn  down  the  price  offered.
TD Waterhouse or E-Trade. Opening an account
is normally free, and once it is opened youHow  Are  Prices  Made  Up?
can deposit money into your account so that
you  can  trade.Prices consist of a bid and offer, with the
Mid price being the actual price of the
What  Type  Of  Broker?share. Most stocks have one or more
marketmakers that set the price for the stock
The cheapest is an execution only broker.so they can make money on the spread in
What this basically means is that you aren'treturn for making a market in that stock. For
given any advice on when to buy or sell theinstance, you may have a stock priced at 136p
shares/trade. Their job is to provide a quotewith a 134p bid and 138p offer. This means
and  fill  the  order.the marketmaker will buy the stock off you
for  134p  and  sell  it  to  you  for  138p.
What  Is  An  Order?
Okay  I  Want  To  Place  The  Trade.
All participants in the market want to do one
of three things. They either want to buy,So in the example above you agree to buy at
sell or hold. You only need a broker when you138p and the deal goes through.
want to buy or sell. Holding the shares takesCongratulations you now own shares in Company
care of itself ( and is the least expensive'X'. If you pay the full offer price, it is
while  your  stocks  are going up in price ).also known as the 'touch' price. One thing to
check is the normal market size for the
Online  Trading  Platformsshares you wish to buy.



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