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The Broker
Date Added: September 1st, 2005
Article provided by TeenAnalyst.com
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Unfortunately, buying stock isn't as easy as walking into a grocery store and telling the clerk "Hi, I would like 10 shares of Microsoft". You actually have to set up some form of an account with a stockbroker or online broker.
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A stockbroker is a person who buys and sells stocks for investors. But these people don't just do the buying and selling of stocks for you, they also help you out in deciding which investments to make.
In exchange for these services, they charge you a commission on each stock trade that you make. An actual broker may charge anywhere from $30 per trade up to $100+ per trade. This is what hurts us young investors. If you were to pay a relatively low commission of $30 per trade to your stock broker to buy 5 shares of Microsoft at $90 per share, the stock would have to go from $90 per share up to $102 per share just to make up for these $60 in commissions.
But what has been the craze that investors have been talking about is the ability to buy and sell stocks online. The services that allow you to do this are called online brokers.
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Online brokers are pretty much websites that you go to and manage your stock portfolio and allow you to buy and sell stocks.
Because you don't actually talk to a person when you do this, you are actually handling your money by yourself. You just type in what stocks you want to buy and how many shares and the online broker buys them for you.
And because there is no interaction between investors and stockbrokers, you don't have to pay those high commissions that stockbrokers pay. The commissions that you do pay usually range from as low as $5 per trade up to around $30 per trade.
Deciding which one you want to deal with is important. If you feel like you can handle all of your investments on your own, you might want to strongly consider an online broker. But if you want some help with your investments, a stockbroker would be better for you.
Because online brokers offer you more access to buying and selling stocks, it is extremely important not to get too carried away and always talk to your parents before you buy and sell stocks.
But if you do decide that you want to deal with an online broker and your parents agree to it, you need to decide which one is best for you by evaluating all of them.
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Another Great Site!
Be sure to head over to TeenAnalyst for lots of great investment articles!
TeenAnalyst.com
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An Introduction to Investing
This article will help you get acquainted with the basics…
Stocks (The Basics)
This article is for anybody who wants a brief overview of the basics of stocks…
Stock Quotes
Ever wondered how you read a stock quote? This article explains most of the information you find in them…
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