what does this mean?? stock trading on scottrade?

Question

You can now trade stocks online – market and limit orders – for just $7! Yes, that's right, just $7 for market AND limit orders on Listed and NASDAQ stocks no matter how many shares you trade! WHAT IS THE $7.00 dollars for??? what do they mean?

Answer 1

right idea wrong math.

1 share at $8.50+ $7 commission is 15.50 for 1 share of xyz. Other than that he has it right. But that is why you want to buy at least 10 shares (some would say more) of xyz that way your "commission hit" is actually .70 which in turn makes your profit margin that much better. One share won't do jack for you which is why you want to buy at least 10 but some say 100 at a time.

as for limit orders I stongly recommend using this tatict that way you can get xyz at the price YOU want. not what teh market tells you how much it is. say you look at asia tonight and the Nikkei is taking a 185 point hit because of US economy concerns you don't feel good about a short order (risky too) but you feel that xyz will come down tommorrow so you might want to consider placing a buy order at say 8.25 and place a good until cancel on it that way if it only drops to 8.30 you still saved money from not buying it at market but you still don't have it. then the next day xyz reports their earnings came under the estimates and thus now you got the stock at the price you feel comfortable with. Then the next day say ABC buys out XYZ at $11 a share bam done deal. the more shares you bought at 8.25 the more you saved because you didn't place a market order. and thus if you did a short sell you would of lost big time if you didn't get in on the buying before the merger broke.

Answer 2

This means for every trade you make, subject to dollar amount limits, there is a one-time charge of $7. Example, you deposit $10,000 in your scott trade account and place an order for 100 shares of xyz stock. Scott trade will make the trade for you and it will only cost you $7 in addition to whatever the cost of the stock is. So if 1 share of xyz stock is going for $8.50, you would pay $850 for the stock, plus a $7 commision to scott trade for a total cost of $857. If you go with a brokerage house like Merril Lynch this trade could cost you a lot more money, basically because they are a full-service broker, which means they will do research for you, and give you suggestions on what to invest in. If you already know what you want to invest in, it is much cheaper to use a broker like scott trade. Market orders means that you will buy or sell the stock at whatever the market price is, limit order means that you are placing a limit on how much you will pay to buy a stock, or place a limit on how much you will accept to sell a stock. Market orders will be filled faster because you will accept any price. Limit orders may never fill because your price might not be met.

Zyberian--If you read my whole post I was talking about buying 100 shares, not 1.

Answer 3

This means that you shouldn't be trading with a deep discount broker.

I use Scottrade but I don't believe they're a good place for a new trader.

Use Schwab or Fidelity for trading. Start with Mutual Funds, move to ETF's and later to Stocks.

Read as much as you can for a couple of years (on investing).

Good luck!

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