The Foundation

The first thing an investor has to figure out is which broker to use. There are many, many brokers that you could create an account with. Robin Hood revolutionized trading for retail investors because they started zero commission stock trading. Lots of other brokers started doing that too. Remember your stocks are not exactly free! Robinhood gets rebates from market markers which pays for the “free” trades. Also, the app has a lot of other features, such as being a gold member and a margin account. I decided to use E*Trade because I already had an open account when I invested in Exchange Traded Funds, or EFTs, back in the day.

E*Trade has a similar structure where most stock trades are free and other trades might cost some commissions like stock options. I linked my E*Trade account to my Wells Fargo account to fund my investing adventure. I decided to move over one thousand dollars from my account to get me started. Usually, it takes a few days for the transfer to post to your investing account. Other ways you can fund your account is through digital check deposit and wire transfer. The wire can post to your account within hours whereas the other funding options can take days to a week.

The practice of buying and selling stocks have been around for a very long time. People used to buy and sell stocks that were actually pieces of paper and now you can jump on a smart phone and move millions of dollars with a touch of the screen. There are several different ways to invest your money, such as stocks, mutual funds, EFTs, bonds, options. I’m going to focus on options trading because it’s less capital intensive and it’s harder to understand. Although, just buying basics stocks is a very easy concept. Buy a stock a specific price and hope that it increases before you want to sell it! That’s the basics with basics stocks.

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