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:
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:
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.