What is the difference between a trading account at a brokerage firm and opening an online stock account?
Is there any difference between opening a trading account at a brokerage firm and opening an online stock account? If yes, what are the differences? (I am a complete rookie…. in need of your help)
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There is no real difference between a trading account at a brokerage firm and opening an online stock account except in the way in which you trade. With the first mentioned account you would communicate via the telephone and place your buy and sell orders at those times. The second way you mentioned you access the broker’s website and place your buy and sell orders there: this usually costs less.
There is no absolute differences if comparing a Schwab against an Etrade…. The real difference is whether they’re a “full service broker” or not.
Examples of “full service” are;
Merrill Lynch
Edward Jones
Wachovia
These brokers tend to have very little available on the web. Their strength is having a personal broker assigned to you. The weakness… extreamly expensive with sometimes flawed advice.
Some on-line brokers have access to costly advice. (less costly than “full service”, such as;
Schwab
Fidelity
Most “on-line” brokers offer no or little advice, but are significantly less costly;
TD Ameritrade
eTrade
Scottrade
ThinkOrSwim
Interactive Brokers
Tradestation
Tradeking
The best way to go about this is to read several books on Investing and Mutual Funds. Start with the Dummy series.
You’ll be amazed, after 3 months to a year….. how much you’ll learn. It will save you 10’s of thousands of dollars… over a lifetime.
Actually, there is no difference between opening a trading account at a brokerage firm and having an online trading account apart from in the way, which you trade. An account opened with a brokerage firm in which you can communicate to you broker via phone and tell him to place you orders at the same time. While in an online account you can place your orders yourself by going to the web site of that particular broker. The method of online account is very handy.