How to Buy Stocks Online with Scottrade

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I‘ve managed our investments for almost 20 years. With one exception, all of our investments are in mutual funds. So when I executed my first stock trade last week with Scottrade, I’m embarrassed to admit that I was a tad nervous. The funny thing is that I wasn’t nervous about the investment itself (2200 shares of Citigroup). I was nervous about executing the trade.

I wasn’t sure how complicated the process would be. I knew there were different types of trades (market, limit, etc.), and I wasn’t sure if I’d get that aspect of the trade right. I worried about how quickly the trade would be executed and what price I’d get for the stock. Basically, I was a little intimidated by the unknown. The funny thing is the who process took less than 60 seconds. For those new to online stock trading, here’s just how simple it is.

Earlier in the month, I opened an online brokerage account with Scottrade. The account is for an SEP IRA, and I funded the account with about $15,000. As my first investment, I picked Citigroup (ticker: C). My primary reason for picking Citigroup is that I think it’s undervalued at $3.40 a share. I planned to invest $7,500, or about 2,200 shares.

Within Scottrade the site has a “Trade” tab. Clicking on it takes you to a very simple stock trade form that looks like this:

Scottrade - Stock Order Entry

As you can see, there are only a few pieces of information you need. In the first drop-down box, you indicate the type of order you are placing. In my case, it was a buy order. You then enter the number of shares you want to purchase and the ticker symbol of the stock. Next comes the order type. For a heavily traded stock like Citigroup, a market order was fine. It executed immediately. For thinly traded stocks, however, a different order type may be more appropriate. And then you click the Review Order button, which brings up the following screen:

Scottrade - Stock Order Review

If the order is accurate, you click the “Place Order” button and you’re done. It’s really that simple. The order was placed immediately.

Other than automatic investments in Berkshire through Sharebuilder, the investment in Citigroup was my first trade execution with an online broker. While I can’t compare the process with other online discount brokers, it’s hard to imagine it getting any easier than Scottrade.

Published or Updated: July 30, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Ryan says:

    I’m constantly searching for step by step instructions for following trade practices by others. Although I do no use Scott trade I like seeing screen shots of other financial trading sources and hearing more about how individual’s are using them.

  2. Hope says:

    can trade online with scottrade from outside the US especially from Nigeria?

  3. Austex says:

    I’m also feeling sheepish about how little I know in this area and have been intimidated to try making such a purchase. Just curious about why you chose Scottrade for this purchase and Sharebuilder for another? How you decide which to use. And what do the different types of orders mean? More info on this would be great. Thanks.

    • DR says:

      Austex, I chose Sharebuilder initially because I wanted to invest in Berkshire B shares. At that time (before the recent split), B shares were trading at about $3000+ a piece. With Sharebuilder, I could invest a set monthly about of a few hundred dollars, and Sharebuilder would buy partial shares for me. That was the only reason I went with Sharebuilder, but I never intended it to be my primary online broker. I went with Scottrade for my IRA because I’ve heard great things about it. It’s trades cost just $7, it has excellent trade execution by all accounts, and it has offices everywhere if I ever want to walk in and talk to a real person. So far I haven’t been disappointed. As for the types of orders, that’s a great idea for a new post (I’m working on it).

  4. Steve says:

    DR, I too just funded a SEP-IRA on Scottrade. I’ll admit right up front, I’m an investment newbie. I do have a separate 401k with Vanguard, and with that account, I log in and choose to invest percentages of my 401k balance in various funds that Vanguard manages.

    My question is, do I not do the same/similar with Scottrade? Do I instead use my SEP-IRA balance as funding source for buying actual “standalone” stocks, or mutual funds, etc? I guess I’m just wondering, now that I have my account funded, what the heck do I do?

    Any info is appreciated!

    • DR says:

      Steve, with Scottrade (like any brokerage account), what you invest in is totally up to you. You can invest in mutual funds, ETFs, stocks, or even options if you want. I’m using my Scottrade SEP-IRA to begin investing in individual stocks for the first time. But the choice is really up to you.

  5. One Week FSBO says:

    Scottrade is a decent company. Just make sure you do your own homework and research your own trades.

  6. Rod says:

    Never ever make Market orders! Only use LIMIT orders! A market order allows you broker to buy or sell at any price they desire even 1 cent. A LIMIT order they have to give you that price or better.

  7. Andrew Flaherty says:

    @ DR or Rod,

    On the stocks order entry form, next to the “shares” field, there is a box, AON (All or None)… what does this option mean and should I select it?

    Thanks in advance for your help! I’m very new to this.

    -Andy

    • Rob Berger says:

      Andrew, AON (all or none) means you either want to buy the number of shares in your order or none at all. For example, if you place an order for 100 shares at $25, the order will either be completely filled or not at all. If you don’t select AON, you may end up with something less than 100 shares at $25. Hope that helps and best of luck!

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