Brokers and Online Trading: Accounts And Orders
AAA
  1. Brokers and Online Trading: Introduction
  2. Brokers and Online Trading: What Does A Broker Do?
  3. Brokers and Online Trading: The Costs
  4. Brokers and Online Trading: Full Service Or Discount?
  5. Brokers and Online Trading: Choosing A Broker
  6. Brokers and Online Trading: Accounts And Orders
  7. Brokers and Online Trading: Conclusion

Brokers and Online Trading: Accounts And Orders


Types of Accounts
Depending on what type of securities you hold, there are four major choices you have when opening an account:

Cash Account: The basic account where you deposit cash to buy stocks, bonds, mutual funds, etc.

IRA Account: For people looking to set up an individual retirement account.

Margin Account: Margin basically allows you to borrow from your broker against the cash and securities in your account. Profits can diminish quickly when you use margin, so be very careful! Learn about how this works in our Margin Trading Tutorial.

Option Account: Only seasoned investors should consider this choice. This type of account allows you to trade options, which are much riskier investments than stocks or bonds.

If you already have a brokerage account and wish to move it to another broker the process is quite easy. Just contact the brokerage you are signing up with and they will either do the paperwork for you or help you with the proper forms.

I'm ready to trade, now what?

In order to make your trade you have to be specific about how you want the transaction to be performed. The following are common order types you'll encounter when placing an equity order using an online interface or the phone:

Market Order: An order that requires immediate execution at the best price available. These are generally the cheapest trades to place because there is little work or maintenance required by the broker.

Limit Order: An order to transact at a specified price. This guarantees the price at which you will buy or sell a security. Limit orders are usually more expensive than market orders.

Stop Order: A market order that trades after a specified level has been reached. This may be a stop-loss or stop-limit. The exact price cannot be guaranteed, but this can be a good way to protect your downside.

All or None (AON): A stipulation on a limit order either to buy or sell a security only if the broker can fill the entire order, not part of it.



Day Order: An order that expires at the end of the business day if it has not been filled.

Good Till Canceled (GTC):An order either to buy or to sell a security that remains in effect until the customer cancels it or until it is executed by the broker.

Fill-Or-Kill: An order for immediate execution. If it cannot be filled immediately the order is automatically canceled.

Short Sale: Short selling is an advanced investing technique in which stock is borrowed and sold with the hopes of returning the stock at a lower price.

Buy to Cover: An order placed to close out a short position.

Brokers and Online Trading: Conclusion

  1. Brokers and Online Trading: Introduction
  2. Brokers and Online Trading: What Does A Broker Do?
  3. Brokers and Online Trading: The Costs
  4. Brokers and Online Trading: Full Service Or Discount?
  5. Brokers and Online Trading: Choosing A Broker
  6. Brokers and Online Trading: Accounts And Orders
  7. Brokers and Online Trading: Conclusion
RELATED TERMS
  1. Bid Wanted

    An announcement by an investor who holds a security that he or ...
  2. Multibank Holding Company

    A company that owns or controls two or more banks. Mutlibank ...
  3. Short Put

    A type of strategy regarding a put option, which is a contract ...
  4. Wingspread

    To maximize potential returns for certain levels of risk (while ...
  5. Volatility Smile

    A u-shaped pattern that develops when an option’s implied volatility ...
  6. Nadex

    Nadex stands for the North American Derivatives Exchange, a regulated ...
  1. What are the most common momentum oscillators used in options trading?

    Read about some of the most common technical momentum oscillators that options traders use, and learn why momentum is a critical ...
  2. How are Morning Star patterns interpreted by analysts and traders?

    Understand the elements of the morning star candlestick pattern and how this reversal signal is interpreted by traders and ...
  3. What are the best indicators to identify overbought and oversold stocks?

    Learn about the interpretation of the relative strength index and stochastics, two of the most popular indicators of overbought ...
  4. How effective is creating trade entries after spotting a Golden Cross pattern?

    Explore the components of the golden cross pattern for elements of effective trading strategy based on this pattern, including ...

You May Also Like

Related Tutorials
  1. Bonds & Fixed Income

    Investing For Safety and Income Tutorial

  2. Economics

    American Depositary Receipt Basics

  3. Investing Basics

    Stock Basics Tutorial

  4. Options & Futures

    Binary Options Tutorial

  5. The New York Stock Exchange
    Mutual Funds & ETFs

    Top ETFs And What They Track: A Tutorial

Trading Center