STOCK BROKER 101

• Stock Broker 101:  Part Eleven of the Stock-Trading-101.com series. 

Click Here to Return to Stock-Trading-101 Part One

Stock Broker Part Eleven:  How to buy stocks with a stock broker

The most common method used to purchase stocks is through a stock broker account or a stock brokerage account. Stock Broker firms come in different shapes and sizes. Full service stock broker firms will assign a salesperson to offer advice on which stocks to purchase. Traditionally discount stock broker firms typically require you do the stock research before you place a trade. 

Money magazine and other publications often rank the services of brokerage accounts. One example of a discount stock broker firm that gets consistent high marks is Charles Schwab and Company.

Stock Broker Charles Schwab

Procedure for stock purchase through a online discount Stock Broker

1. Select a stock broker firm
2. Fill out an stock broker application
3. Deposit money with the stock broker firm
4. Determine the amount of money you wish to invest (note:  not necessarily your entire deposited amount)
5. After stock research determine which company you will make a stock investment.
6. Determine the stock symbol of the stock you wish to purchase.
7. Determine the price of the stock per share that you are willing to make a purchase.
8. Determine the number of shares you will purchase by dividing the amount of money you wish to invest by the share price of the stock you've selected to make a stock investment.
9. Place an order to purchase stock shares at the selected price
10. Confirm that your order is received by the stock broker
11. Confirm that your transaction is completed by the stock broker.
12. Document the purchase transaction and keep records for tax purposes.  Some stock broker firms perform this service for you.

Stock Broker 101 Key Terms:  

• Stock Share: A share of stock represents ownership of a portion of a company. 
• Stock trading: Buying and selling stock shares. 
• Stock Broker:  A firm that processes purchases and sales of stock shares for individuals or companies in exchange for receiving a fee or a commission.

Stock trading Part Eleven Quiz:

1. Most investors purchase stocks through?
   a. Stock Market
   b. Stock Broker
   c. 401(k)
2. The first step in opening a stock broker account involves
   a. Research on the best stock to own
   b. Research on the best stock broker service
   c. Contacting a Day Trading firm
3. Investor ABC decides to invest $1000 in Dell Computer.  Dell is selling for $20 per share.  How many shares should he place an order to buy?
   a. 100
   b. 200
   c. 50

Answers to Stock Trading Part Ten Quiz, 1.b, 2.b, 3.c

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Hold down the CTRL button on your keyboard and type the letter D to add this website to your favorites.

How do I send myself an email with this Stock Broker website link from Internet Explorer?
Point your cursor to "file" located in the top left of your screen, click on "send", type in your email address.

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