Jump Into (or Out of) the Market on the World Wide Web!
Copyright © 1998 Christine Stoner. All rights reserved.
Between the Starr report, foreign market fluctuation and normal economy ups and downs, the stock market is an exciting place to visit these days. Whether you are currently in the market, or out of the market and thinking of getting back in, online resources for trading abound. You no longer need to make a trip to your local full service or discount broker, or into your bank, to buy and sell stocks, bonds, mutual funds and other trading products including margins and options. Not only can you place trades online, but you have access to research, quotes and company reports to help you make informed trading decisions. Best yet, everything - and I mean everything - can be done across the Internet! You can apply across the Internet, research companies and stocks, get quotes across the Internet and even receive your confirmations online. What could be better? What follows is not a list of some of the online discount brokerages with Web sites through which you can open account and begin trading immediately. It isn't an all-inclusive list of organizations offering online trading. However, these are some of the most comprehensive and reasonably priced online discount brokerages. All of them are worth taking a look at to decide which provider is the best for you when investing your money in the volatile but entertaining stock market.
One of the most popular discount brokers offering online trading is Charles Schwab. This is one of the biggest and, I'd have to say, one of the best. Though the commissions are higher than most of the others I'll mention, there are additional services available to offset this. They offer a complete online investment service from planning investment strategy to selecting investments and account management. The independent analyst research can't be beat when researching a stock purchase. It's also a great place to look for investment ideas. Say you're looking for a new stock to get into - you can look at their showcase stocks by product type (i.e., Retail, Software & Programming, etc.). You can also see a market report which tells you which stocks are moving and why.
My personal favorite of these online discount brokerage sites is Datek Online. Though the site is not as "pretty" as some of the others, it functions well and provides you with everything you need to invest across the Internet, including access to quotes, research and current news. Datek also boasts fast trade executions with a 60-second execution guarantee or the commission is waived on market orders.
Ameritrade has a great site. Through Ameritrade you can place trades online via touchtone phone or, if you feel more comfortable, via a broker. Even if you use one of their brokers to place the actual trade you can use their online investment center for additional information. Through their Web site you can run a demo of the process of placing a trade with them which will show you how quick and easy it is. Their current $8 per trade promotion is certainly a great value and stacks up well against the competition as one of the lowest rates out there. As of October they will be instituting a 60-Second Execution Guarantee similar to the Datek Online guarantee mentioned above. All Web sites of this kind employ security procedures to protect your accounts and privacy. Ameritrade's procedure is called "three strikes & you're out." After three unsuccessful tries entering an account number and PIN, the account is locked and remains locked until an authorized person calls and answers verification questions to unlock the account.
Another site, which bills itself as the "original" online discount brokerage, is E-Trade. Their site is easy to navigate and I liked the fact that you could easily turn graphics off and on; running without graphics can certainly speed your visit during busy times of the day. Their site also has a sense of humor, and is very customer-friendly and easy to read. The E*TRADE Tour gives a great introduction to their services and features, and an explanation of why you should trade with them. Their commissions are very competitive and they offer online assistance 24 hours a day via E*STATION.
DLJdirect has been in the online trading business for 10 years. Their parent company is Donaldson, Lufkin & Jenrette, which is a premier research house on Wall Street. One benefit to opening an account with DLJdirect is a 60-day free trial of their research. A feature of their site is the personalized stock ticker. You can monitor updated prices every 15 minutes for 10 stocks of your choice, plus the day's 10 most active stocks. They have a "How Do I Get Started" page which walks you through their account opening process as well as the procedures for trading. This getting-started information includes a brief description of the type of accounts you could open, which may help you decide which account is right for you.
When choosing an online provider for trading you'll also want to consider NDB.com, National Discount Brokers. They have an easy-to-navigate Web site where you can "Test Drive" their services. They also offer a service guarantee, which ensures that if you are not satisfied with their services they will refund your transaction fee up to a certain amount. Unlike some of the other services, they require a minimum balance to be in your account prior to trading. Their Web site is also currently limited by the fact that you can enter stock and option orders online only. Other orders must be placed with live representatives.
The lowest-priced online trading I found was through Suretrade. They advertise commissions of only $7.95 for online and touchtone trades. Their Web site, though easy enough to navigate, lacks some of the luster of the bigger firms, but they do provide online tours with three different tour "tracks" including the Account Info Tour, Research Tour and Trading Tour. You can place broker-assisted trades as well for a higher commission.
Almost all of the above organizations offer free investing software of one kind or another. Also, they all offer online applications and forms, online help and FAQ sheets in addition to email and telephone customer service. All the brokerages have Securities Investor Protection Corporation Insurance (SIPC) which protects your securities with $500,000 of coverage, $100,000 of which may be in cash. Most also offer some level of additional protection via a commercial insurer. In most cases you can easily view their commission schedules, which are straightforward without the confusing double-talk you get from many brokerages. The best feature about these sites was the system demonstrations (some of which I discussed specifically above) that could be viewed prior to filling out an application.
It's worth taking the time to visit the sites to determine which provider is right for you. In addition to cost considerations, it's important to consider the level of service, quotes, research and other online information you require when making your trading decisions. Whichever provider you decide to use, I hope you make lots of money when you jump into (or out of) the market.
Christine Stoner is a freelance writer out of Elverson, PA. She is also the editor of TimeTipz, a newsletter providing timesaving tips for busy women.