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Ameritrade

http://www.ameritrade.com

Ameritrade is the cheapest firm mentioned here in terms of trading stocks. It is about in the middle with its minimum inital deposit. Much like E-Trade, it does not have any offices. All accounts must be created over the Internet or via mail, and checks must be sent to the company, which can take a while. Ameritrade, unlike E-Trade, charges the same price no matter what type of stock you are trading. The main catch is that Ameritrade charges more money if you would like to make a stop or limit stock order. A stop order can be used to buy a stock if it goes above a certain price or sell it if falls below a certain price. Similarly, a limit order can be used to sell a stock if it goes above a certain price or buy it if it falls below a certain price. If you are planning on holding stocks for months or years, you will probably be uninterested in the additional cost of stop or limit orders. Note that even with the additional cost of placing a limit or stop order, Ameritrade is still less expensive than E-Trade.

Ameritrade, unlike E-Trade, does not even have alliances with banks. It does not appear to be planning any form of easier method to move money into and out of an account. If you plan on transferring money to and from your account a lot, you might not want to get an Ameritrade account.

Ameritrade also does not mention the cost of trading mutual funds on its web site. This is not that important because, if you are only trading mutual funds, odds are you will not want to use Ameritrade. Other firms have much better services that Ameritrade sacrifices for low stock trading costs. Since other firms have free trading of mutual funds (and E-Trade has a lower minimum initial deposit) it is irrelevant how much the trading of funds costs with Ameritrade.

Ameritrade is the best choice for active stock traders who care about the price of trades. It is not a place for people who need to be walked through using the system with a human touch. Ameritrade is not a "brick and mortar" institution, meaning that it has no offices.

That's online trading demystified. Good luck and happy trading!

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