To the amateur investor, the stock market looks daunting and unapproachable. But in the last few years, the Web revolution has made it easier, opening the door to anyone with a computer and a tip.
Now, those of us who want to "throw around" $500 or $1,000, can simply put that money in an Internet account and draw from it for a small transaction fee. Although the fees differ from service to service, the theory is the same: Investors doing their own research and drawing up their own orders.
For people looking to get their feet wet in online stock trading, there are many services out there. Here are some of the best.
www.ameritrade.com: Low, flat-rate commissions make Ameritrade an attractive destination for online trading. No matter how many shares are part of the transaction, it will only cost $8. Stop and limit orders are just $5 more.
Ameritrade advertises access to "real-time quotes, customizable charts, market summaries, company profiles, and earning estimates."
Another plus is the availability of business news. Ameritrade contracts with Business Wire, Reuters and PR Newswire to bring inside information and trading tips to your desktop.
Gadget hounds can sign up to have changes in their portfolio e-mailed to their computers, alphanumeric pagers and enabled mobile phones. Sprint digital wireless customers can even trade with their phones. The access adds up to insurance that you will get out when you need to get out.
www.etrade.com: Even though E*Trade offers virtually the same service for nearly double the cost (listed stocks, $14.95; Nasdaq stocks, $19.95 and limit and stop orders, $19.95 ), people looking to bank online should check it out. For those of us with lighter wallets, E*Trade offers 4.3 percent checking; better than most walk-in banks and credit unions.
Information about more than 5,000 mutual funds and a plethora of stocks is easily accessed through your account. Conventional wisdom says not to bank on a fund's history, but who can ignore a 20 percent annual increase over a five-year period? "Quick Picks" lists funds new to the market and the contents of their portfolios.
One of the more interesting features for true day-traders is the IPO Center. A steady stream of news about the latest initial public offerings on the major trading boards will no doubt pique your interest. Learn about the companies that are planning future offerings and read about their projected futures. Imagine investing $1,000 in Amazon.com on opening day and selling it a month later. You just earned yourself an all-expenses trip to Europe.
Heavy traders will happy to note that their activity earns them a discount. Thirty to 74 trades per quarter costs $9.95 per transaction for listed stocks and $14.95 for Nasdaq and limited and stop orders. More than 75 trades per quarter costs $4.95 per transaction for listed stocks and $9.95 for Nasdaq and limited and stop orders.
www.datek.com: Datek is similar to Ameritrade. For $9.95 for any transaction (up to 5,000 shares), the price is right and the up-to-the-minute stock reports and market information are always a click away.
The best feature on Datek is nighttime trading. The online market is open from 8 a.m. to 8 p.m. on the Nasdaq composite. For traders with an eye on technology stocks (despite the recent plummet), Datek might be your best bet.
If you're really connected with constant Internet at the office or on your home PC, Datek will send you a stock ticker that will run on your screen. Keep an eye on your stocks while performing more mundane tasks like playing video games.
An extra bonus: If your transaction is not processed within 60 seconds, you don't have to pay the transaction fee. That may not offer much solace if you lose your nest egg, but at least they try to offer fast service.
If you are really floundering, an 800 number will connect you to a Datek operator who might be able to talk you down.
Ideas?Feedback? Please contact me at email@example.com
Featured chats of the week:
- Sunday, May 21: Formula One racer Eddie Cheever at sports.excite.com
Winner of the Indy 500 in 1982 talks about next week's race preparations at 6 p.m.
- Tuesday, May 23: Play scrambled ramble at chat.lycos.com
Compete against other players in an race to solve anagrams at 3 p.m.
- Wednesday, May 24: Ska band Dance Hall Crashers at hob.com
An online interview with one of the originating bands in the Berkeley, Calif.-strain of modern ska music at 5 p.m. Also check out The Toasters on Saturday, May 27 at 6 p.m. at the same site.