what does a minimum amount mean when dealing with online discount stock brokers ?

Question

some say $500 min others ask for $2500 min ? does it mean i have to buy stocks worth atleast $500 ?
what if my share prices fell below 500 ?

Answer 1

The minimum amount means, your broker will not let you open an account, unless you have their required amount of money in your account.
Like if you were to open a checking account with a bank and only deposit $10 in it. Most likely, you wouldn't be using it much.
---If a broker requires a minimum of $2500, with only $500 they don't think you'll be making many trades and that's less money for them to make on commissions. With only $500 the maintenance fees and paperwork needed to keep your account open isn't worth their bother.
---No matter what amount of money is in your account, you can buy shares of stock at any price. As long as you have that amount of money in your account.
When they require a minimum amount in your account, that can be in money and the price value of any securities (stock shares) you have in your account.

Answer 2

that is the amount of deposit that they require to open your account. If you open a margin account and deposit $500 then you can buy $1000 worth of stock. Now you do not have to use all of that money to purchase stock. You can purchase just $100 worth if you want. But suppose you do deposit $500 and purchase $500 worth of stock and the price of the stock falls, they will not require you to deposit more money. If however you buy on margin and buy $1000 worth of stock with a $500 deposit and the price of the stock falls a lot, they will require that you deposit more margin or they will sell your position to cove the amount they loaned you.

Answer 3

yes, it means u need to invest minimum amount to be invested by them and it varies. If you have small amount to play, then I would ask u to stay away from stocks. If the portfolio value goes goes down (price fall), after certain time they will ask u to add more fund or pay fees.