Stupid questions : How does Scottrade work?

[Josh_LA]

I'm very tempted to do stocks now that we're at 11 year low.

Here are my Q's

1. How do you fund your account? (Wire transfer? Credit card?)

2. Do you fill a tax form upfront and file next year? Or is it withheld?

3. How do you cash out?

4. Is it only $7 regardless of buy, sell, how much you trade? No other fees?

5. Is there any law or rule against trading the same stock back and forth?

6. Theoretically, if I put in $100, I can put $93 to buy whatever I like, then if it rises 20%, I can sell it for about $111.50, minus $7, $104.50. How soon can I have this money to spend on groceries?

7. Anything else I should know?

YES, I know stocks are not the best investment, I'm only investing what I'm planning to lose.

[TruthisTreason]

I'm very tempted to do stocks now that we're at 11 year low.

Here are my Q's

1. How do you fund your account? (Wire transfer? Credit card?)

2. Do you fill a tax form upfront and file next year? Or is it withheld?

3. How do you cash out?

4. Is it only $7 regardless of buy, sell, how much you trade? No other fees?

5. Is there any law or rule against trading the same stock back and forth?

6. Theoretically, if I put in $100, I can put $93 to buy whatever I like, then if it rises 20%, I can sell it for about $111.50, minus $7, $104.50. How soon can I have this money to spend on groceries?

7. Anything else I should know?

YES, I know stocks are not the best investment, I'm only investing what I'm planning to lose.

A lot of questions.

1. Wire transfer, or go to a office and drop off cash or money order. I think you can mail in money orders, too.
2. No. Depending on what type of account, you'll get a tax form at the end of the year.
3. Depending on the account. If you have a 401, they would be penalized, so, you have to set up an individual account.
4.Pretty much. Nothing to worry about.
5. There is a day trader rule. Just don't make over 3 trades a day for several days in a row, or maintain the cash balance needed for day trading
6. Yes, depending on the type of account, and being general...less than two days
7. When you sign up, you will be greeted by an online chat window to guide you through any questions you have.

[TheState]

A lot of questions.

1. Wire transfer, or go to a office and drop off cash or money order. I think you can mail in money orders, too.
2. No. Depending on what type of account, you'll get a tax form at the end of the year.
3. Depending on the account. If you have a 401, they would be penalized, so, you have to set up an individual account.
4.Pretty much. Nothing to worry about.
5. There is a day trader rule. Just don't make over 3 trades a day for several days in a row, or maintain the cash balance needed for day trading
6. Yes, depending on the type of account, and being general...less than two days
7. When you sign up, you will be greeted by an online chat window to guide you through any questions you have.


TruthisTreason covered most things, but just to clear some things up.

3. You can get a wire transfer or a check.

4. $7 per trade unless the stock is under $1, then its $7+.5% of capital invested.

5. Day trading rule, limit of 4 (so 3) day trades in a rolling 5 business day period. A day trade is buying and selling the stock the same day. You can sell it and buy it back the same day without a problem, or buy it at 4pm the day before and sell at 9:30am the next day without a problem.

7. Ive used Scottrade for years and I've never had a problem. They even gave me my money back when someone hacked my account and bought a pennystock and lost my money. I think its $500 minimum to start an account, but no min or fees after that.

[brandon]

I'm very tempted to do stocks now that we're at 11 year low.

Here are my Q's

1. How do you fund your account? (Wire transfer? Credit card?)

2. Do you fill a tax form upfront and file next year? Or is it withheld?

3. How do you cash out?

4. Is it only $7 regardless of buy, sell, how much you trade? No other fees?

5. Is there any law or rule against trading the same stock back and forth?

6. Theoretically, if I put in $100, I can put $93 to buy whatever I like, then if it rises 20%, I can sell it for about $111.50, minus $7, $104.50. How soon can I have this money to spend on groceries?

7. Anything else I should know?

YES, I know stocks are not the best investment, I'm only investing what I'm planning to lose.

Funny coincidence.... I just got back from my local scottrade branch about 20 minutes ago.
I just opened an account. It's my first brokerage account, so we can learn together.
See: http://www.ronpaulforums.com/showthread.php?t=182162

I'll answer your questions to the best of my ability in a minute

[brandon]

Here are my A's

1. You can fund your account several ways. The easiest way is by linking it directly to a checking/savings account you have at a bank. If you have access to online banking through your bank, you can set this up instantly. If you don't then they make two microdeposits to your bank account that you will use to verify it is your account. This takes 2-3 days.

Additionally, you can send them a check, money order, or do a wire transfer.

2. I don't know how this works yet

3. Same way you cashed in. If you have your scottrade account linked to your bank account, you can transfer the funds directly to it. This either will occur instantly, or take 2-3 days. I'm not sure yet.

4. Yes

5. I don't think so, but I'm not sure

6. See #3. Also, the minimum opening balance is $500, so u cant just put in $100

7. You must go to the local branch office to open your account. You can fill out the application online, but they will then call/email you to tell you that you have to come into the office so they can photocopy your state ID before your account is active.

Also decide if you want options or margin access on your account before you set it up. Since you are new at this, you most likely dont want either.

[brandon]

I also have a question to add:

If I put in a limit buy/sell order that is never executed, do I still have to pay the commission/fees?

[Liberty Rebellion]

Brandon was spot on with his answers.

Regarding tax stuff. I just made my first purchases last week. After your purchases go through, on one of your subsequent logins they will bring you to a page they tell you to print to keep for your tax records. I printed and saved the page (I retain electronic and hard copies of everything).

Sucks for me though. I invested in APL on Friday. Monday they released Q4 results and they weren't too good. I bought in at $5.46 now trading at $3.61 :o

Oh well, I'm in it for the long haul. I'm pretty sure APL will come back once oil and natural gas start going back up in price and my other stocks aren't doing too badly.

[TruthisTreason]

I also have a question to add:

If I put in a limit buy/sell order that is never executed, do I still have to pay the commission/fees?

I pretty positive the answer is no.

[surf]

generally limit trades will cost you more than the $7 "market" trade amount. check the fees on limit trades.

[Josh_LA]

6. See #3. Also, the minimum opening balance is $500, so u cant just put in $100



So I have to put in $500, but I can let it sit and only play with $100?

[brandon]

So I have to put in $500, but I can let it sit and only play with $100?

yep.

It's not really a good idea to make orders for only $100 though. the fee to buy it and sell it will consume 14% of your initial investment, (as you pointed out above.)

Personally, I would stick to orders worth at least $300

[TheState]

generally limit trades will cost you more than the $7 "market" trade amount. check the fees on limit trades.

Not at Scottrade, no matter the type, it's still $7, (unless the stock is under $1)

[Josh_LA]

yep.

It's not really a good idea to make orders for only $100 though. the fee to buy it and sell it will consume 14% of your initial investment, (as you pointed out above.)

Personally, I would stick to orders worth at least $300

thanks, just thinking worst case scenarios. What I'm allowed to lose.

[Josh_LA]

Not at Scottrade, no matter the type, it's still $7, (unless the stock is under $1)

So you mean if company XUI is $.50 a share

Even if I buy 200 shares for $100, it's still considered "under a dollar" so I have to pay $7 + x%?

[TheState]

So you mean if company XUI is $.50 a share

Even if I buy 200 shares for $100, it's still considered "under a dollar" so I have to pay $7 + x%?

Correct, it will be $7 + .5% of $100, so $0.50, so $7.50 total. If my math is correct hah

This is only for stocks under $1

[Josh_LA]

Correct, it will be $7 + .5% of $100, so $0.50, so $7.50 total. If my math is correct hah

This is only for stocks under $1

I see, so if I'm stupid, I can still buy $1 worth and pay $7+ fees.

[TheState]

I see, so if I'm stupid, I can still buy $1 worth and pay $7+ fees.


Correct.

[Josh_LA]

5. There is a day trader rule. Just don't make over 3 trades a day for several days in a row, or maintain the cash balance needed for day trading


So 3 transactions a day period?

Or are there accounts for frequent traders?

[constitutional]

Use the referral system to get 3 free trades.

Let me know and I will give you the link of mine so we both get 3 free trades.

[Josh_LA]

Use the referral system to get 3 free trades.

Let me know and I will give you the link of mine so we both get 3 free trades.

I think I will do that, but I'm open, shall I make this an auction? :)

[TheState]

So 3 transactions a day period?

Or are there accounts for frequent traders?

You can have unlimited day trades if you have over $25,000 in your account. Otherwise you are limited to 3 daytrades in a rolling 5 business day period. These are ONLY when you buy and sell the same stock the same day. NOT if you sell and re-buy, or just make 10 buys of separate stocks, etc..

You have unlimited transactions, just 3 daytrades.

[EgwaTlvdatsi]

I've been thinking about something like this for a long time, but never really remembered to actually look anything up on it, though. However, I have just one tiny little question, would it be OK for a poor person who really needs every dime he has (as well as having a family of four) to try something like this? And what trade companies exist online that are decent and, I guess, the lowest in charges?

[TheState]

I've been thinking about something like this for a long time, but never really remembered to actually look anything up on it, though. However, I have just one tiny little question, would it be OK for a poor person who really needs every dime he has (as well as having a family of four) to try something like this? And what trade companies exist online that are decent and, I guess, the lowest in charges?

I'm afraid I can only answer the second part of that question hah. Scottrade is about the cheapest out there if you want instant trades. With some companies, you can get cheaper, like $3 a trade, but those won't be instant trades. The trade will go through at the end of day or something similar. They will also have limited trade types.

[danberkeley]

I doubt this is the bottom for stocks.

[zippy81]

Is there any way to invest in foreign stocks through scottrade?

[Josh_LA]

I doubt this is the bottom for stocks.

just getting ready & feet wet

More questions :

1. Can you trade a $30 stock for 2 $15 stocks? Or do you have to sell A, then take your money to buy B?

2. Is $7 a transaction fee? Or, basically if :

I want $300 in stock A
And $200 in stock B
another $100 in stock C

Is there a way I can put them all in a shopping cart to pay $7 total at once? Or must they all count as one transaction, thus, $21 for 3 trades?

3. If Google is $350 a share, can I only buy one share at a time, and not a portion of it if I have less than $350?

[brandon]

just getting ready & feet wet

More questions :

1. Can you trade a $30 stock for 2 $15 stocks? Or do you have to sell A, then take your money to buy B?

2. Is $7 a transaction fee? Or, basically if :

I want $300 in stock A
And $200 in stock B
another $100 in stock C

Is there a way I can put them all in a shopping cart to pay $7 total at once? Or must they all count as one transaction, thus, $21 for 3 trades?

3. If Google is $350 a share, can I only buy one share at a time, and not a portion of it if I have less than $350?

1. Must sell stock then buy new stock. Can't trade stock for stock.
2. No shopping cart. You have to pay 7 for each different stock. $21 for 3 trades
3. Can't buy a portion, you have to buy the whole thing.

[Ethek]

I use ameritrade. It may seem high a 9.99 a trade but there are really 0 fees with the account so no supprises, no limits on trades that I know about. Funding is quick and you can tie in ACH direct to your bank. The iphone app alone is worth the 2$ a trade to me.

Start an account with $2000 and you get unlimited trades for 30 days. I only ended up using about 20 trades during the time. Should have been up 30% if I trusted the trades and the people I was listening too. I'm up 10% even with the fees.. but just getting involved I've learned tons.

Also, the phone service at Ameritrade has always been helpful.. but I have had any issues that have been too involved yet.

[Josh_LA]

I use ameritrade. It may seem high a 9.99 a trade but there are really 0 fees with the account so no supprises, no limits on trades that I know about. Funding is quick and you can tie in ACH direct to your bank. The iphone app alone is worth the 2$ a trade to me.

Start an account with $2000 and you get unlimited trades for 30 days. I only ended up using about 20 trades during the time. Should have been up 30% if I trusted the trades and the people I was listening too. I'm up 10% even with the fees.. but just getting involved I've learned tons.

Also, the phone service at Ameritrade has always been helpful.. but I have had any issues that have been too involved yet.

what is their minimum to start?

[Ethek]

From the ameritrade site.

Account minimums

* There is no minimum funding required to open an account
* Accounts funded with less than $1,000 are not eligible for any promotions
* Electronic funding minimum is $500
* Margin or option privileges on account require a minimum of $2,000

No maintenance fees

[danfinance2008]

also from what i remember

someone stated you needed to have 2000 balance for a margin account
this way when you sell a stock the money is available right away


if you do not have a margin acount you will have to wait 3 days ( i think ) for the money to clear from the sale of the stock


and from what i remember, call to make sure
the daytrading rule applys to margin accounts
if you have a cash account you can trade as much as you want, no daytrading rule
but will have to wait for money to clear

but call to make sure i am right

dan

[WRellim]

I'm very tempted to do stocks now that we're at 11 year low.

Here are my Q's

1. How do you fund your account? (Wire transfer? Credit card?)

2. Do you fill a tax form upfront and file next year? Or is it withheld?

3. How do you cash out?

4. Is it only $7 regardless of buy, sell, how much you trade? No other fees?

5. Is there any law or rule against trading the same stock back and forth?

6. Theoretically, if I put in $100, I can put $93 to buy whatever I like, then if it rises 20%, I can sell it for about $111.50, minus $7, $104.50. How soon can I have this money to spend on groceries?

7. Anything else I should know?

YES, I know stocks are not the best investment, I'm only investing what I'm planning to lose.


AH, so you're planning on placing a couple of gambling bets are you?
:D

I recently (last year) started accounts on both Etrade and Scottrade -- stay away from Etrade (they are a PITA); the Scottrade experience (so far) has been great.

Regarding the Q's:


1. How do you fund your account? (Wire transfer? Credit card?)

Best method (for big amounts) is wire transfer (but your bank will charge a fee for that). Second best method is to add to your account at the local Scottrade office (they have hundreds around the country -- probably one that is fairly close to you, maybe 1/2 hour to hour drive away at the most).

You *can* link up your checking acount to do a transfer via e-check, but the funds are normally "held" for a few days (exactly why? I am not sure... I know that Etrade "locked-up" my funds for well over a week -- when I started the scottrade acct, I did wire transfer & money was available for trading the next business day).

2. Do you fill a tax form upfront and file next year? Or is it withheld?

Pretty much up to you. The documentation that they require is minimal if you just want to do cash trades on a simple (regular) account. If you are doing a self-directed IRA, well expect all kinds of extra paperwork -- if you're doing a rollover, that takes time to coordinate.

[...]

7. Anything else I should know?

Absolutely. NEVER forget that Scottrade has LOCAL offices -- and if you call their main 800 assistance number (during the daytime anyway) you will be forwarded to a REAL HUMAN BEING who works AT YOUR LOCAL OFFICE.

So far I have found the Scottrade people able to either immediately HAVE an answer to my questions -- OR, they have been upfront and totally honest about "not knowing" but then promise to get back to me ASAP... and (an amazing thing for this day in age) they actually DID get back to me with a solid answer (including a link to relevant documents), in the same afternoon that I asked (liek maybe an hour later).

Now, maybe I just got lucky with my local office personnel -- and YMMV -- but something tells me there is a really good corporate training program, and (like the old Avis car rental motto -- because they're smaller, they have to work harder to get/keep your business).

BTW, good luck!

[WRellim]

just getting ready & feet wet

More questions :

1. Can you trade a $30 stock for 2 $15 stocks? Or do you have to sell A, then take your money to buy B?

2. Is $7 a transaction fee? Or, basically if :

I want $300 in stock A
And $200 in stock B
another $100 in stock C

Is there a way I can put them all in a shopping cart to pay $7 total at once? Or must they all count as one transaction, thus, $21 for 3 trades?

3. If Google is $350 a share, can I only buy one share at a time, and not a portion of it if I have less than $350?


Beware.

Scottrade is a good RELATIVELY cheap way to make trades, but with such small-dollar transactions (those are REALLY small), the fees will eat up your gains and/or make your losses much more severe.

It's sort of like getting 5% interest on a checking account, but then having to pay $10 per month in account fees. If you only have $500 in that account, you're going to go backwards -- if you have $100 in it, you're going to go broke by the end of the year.

To my mind, anyone who has less than $10K worth of "play" money probably shouldn't be mucking around. (And by "play" money, I mean money that is in addition to substantial other savings -- emergency fund, 6 months worth of ALL expenses, other savings that would pay car payments + mortgage + property taxes for next year or two, etc).

Seriously, otherwise whatever "gains" you might make -- even on ideal stock picks -- can be totally offset by additional "late fees" and other malarkey if your money situation is at all "tight".

[brandon]

Beware.

Scottrade is a good RELATIVELY cheap way to make trades, but with such small-dollar transactions (those are REALLY small), the fees will eat up your gains and/or make your losses much more severe.

It's sort of like getting 5% interest on a checking account, but then having to pay $10 per month in account fees. If you only have $500 in that account, you're going to go backwards -- if you have $100 in it, you're going to go broke by the end of the year.

To my mind, anyone who has less than $10K worth of "play" money probably shouldn't be mucking around. (And by "play" money, I mean money that is in addition to substantial other savings -- emergency fund, 6 months worth of ALL expenses, other savings that would pay car payments + mortgage + property taxes for next year or two, etc).

Seriously, otherwise whatever "gains" you might make -- even on ideal stock picks -- can be totally offset by additional "late fees" and other malarkey if your money situation is at all "tight".

True, although I think if one just is aiming to learn a thing or two about trading and not necessarily make money, a balance of only 1-2 grand in your brokerage account would be sufficient.

In addition, if you're short on funds you can just stick to options trading (gambling). If you're options move big into the money whatever fees you paid are almost irrelevant.

[WRellim]

True, although I think if one just is aiming to learn a thing or two about trading and not necessarily make money, a balance of only 1-2 grand in your brokerage account would be sufficient.

In addition, if you're short on funds you can just stick to options trading (gambling). If you're options move big into the money whatever fees you paid are almost irrelevant.


Just I've been there (recovering from being "nearly broke") and saw others try to use stock market for quick gains from low savings (versus me doing more traditional "saving"); and I got out of being "broke" much quicker and stronger than they did (actually most of them just lost their shirts).

IMO, "easy money" is a trap for the vast majority of people (regardless of whether it is credit cards, or playing the market) -- they just don't have the "feel" (mindset?); much less the wherewithal to really trade properly (and that goes doubly for the current uber-bear market environment).

But you ARE right, if the person is just using it as a "learning experience" -- and therefore counting any/all losses as simply a "learning fee". But it can still be an expensive way to learn (and it really BETTER be their "play" money -- it's sad to see kids w/o clothes, shoes or food because daddy wanted to learn about playing the market -- and I've seen cases of THAT in real life).

[Josh_LA]

But you ARE right, if the person is just using it as a "learning experience" -- and therefore counting any/all losses as simply a "learning fee". ).

That's me, only investing what I can afford to lose, so when I put in my $500 minimum, I've already told myself "it's gone".

[scooter]

1. How do you fund your account? (Wire transfer? Credit card?)

Best method (for big amounts) is wire transfer (but your bank will charge a fee for that). Second best method is to add to your account at the local Scottrade office (they have hundreds around the country -- probably one that is fairly close to you, maybe 1/2 hour to hour drive away at the most).

You *can* link up your checking acount to do a transfer via e-check, but the funds are normally "held" for a few days (exactly why? I am not sure... I know that Etrade "locked-up" my funds for well over a week -- when I started the scottrade acct, I did wire transfer & money was available for trading the next business day).

Most of the basic questions have been answered for you. However, if you do e-check transfers from your checking account, Scottrade no longer ties up the funds. They will instantly credit your account even though they technically haven't gotten the funds from your bank yet. (very nice service)

Personally, I think unless you have at least 2-3 thousand dollars to trade with, I'd put your money somewhere else. Even $7 fees will eat you alive, plus you really want to have enough money in your account so you can open positions in stages rather than buying all the stock in a certain company at once.

I've never used it before, but I'm pretty sure www.zecco.com has free trades of all types, however, I think it doesn't have a live ticker. Your ticker is probably 20 minutes behind, whereas Scottrade's screen is tick by tick up to the second.

[Mini-Me]

You can have unlimited day trades if you have over $25,000 in your account. Otherwise you are limited to 3 daytrades in a rolling 5 business day period. These are ONLY when you buy and sell the same stock the same day. NOT if you sell and re-buy, or just make 10 buys of separate stocks, etc..

You have unlimited transactions, just 3 daytrades.

Also, you can only do unlimited day trades if you have over $25,000 in a margin account in particular. If you have a cash account instead, Regulation T technically prohibits you from reselling securities purchased with unsettled funds. (If you sell something, the transaction doesn't technically settle for three business days...you can buy more securities with that money, but you can't sell them again with a cash account until the first sale has cleared three days later. With a margin account, you can sell them immediately, so long as you either follow the day-trading rules or have at least $25,000 capitalization.)

Of course, in Josh's case, day trading is pretty much an impossibility. $7 transaction fees are very low compared to most brokers, but they're high enough that swing trading is the most frequent kind of trading you can get away with using $500...and that's only if you have exceptional timing ability, to say the least. ;)

[LibForestPaul]

I use ameritrade. It may seem high a 9.99 a trade but there are really 0 fees with the account so no supprises, no limits on trades that I know about. Funding is quick and you can tie in ACH direct to your bank. The iphone app alone is worth the 2$ a trade to me.

Start an account with $2000 and you get unlimited trades for 30 days. I only ended up using about 20 trades during the time. Should have been up 30% if I trusted the trades and the people I was listening too. I'm up 10% even with the fees.. but just getting involved I've learned tons.

Also, the phone service at Ameritrade has always been helpful.. but I have had any issues that have been too involved yet.

Why does TDAmeri have (2 sites). Izone and tdameritrade, differences?

P.S. Trading on foreign boards?
Limit Orders?