Financial Markets For The Rest Of Us|
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
you sell stocks, your proceeds are deposited back into this account, giving you more available cash. You buy and sell stocks through your broker by placing orders.You may do it on the Internet or on the phone. Regardless of the method, it's your finger on the trigger. Once you confirm your order, the broker acting on your behalf will carry out your order and confirm it with you when the order has been executed.
Let's say you want to buy Ford Motor Corporation Stock. This stock is traded on New York Stock Exchange (NYSE) under the symbol F. All stocks are traded under their own unique symbols known as ticker symbols (a relic from the past where the stock prices were printed on ticker tapes invented by Thomas Edison). Examples:Microsoft (MSFT), General Electric (GE), Hewlett Packard (HWP), Citigroup (C), Gillette (G), McDonalds (MCD), etc. As an investor you don't even have to be familiar with the stock symbols.Your broker will be able to figure it out. (Quick hint: Stocks trading in NYSE have 1, 2, or 3-letter ticker symbols while NASDAQ stocks have 4 or more letters in their ticker symbols.)
If Ford stock is selling for $50 per share and you have $1,000 to invest, the calculation is straightforward.You can buy 20 shares of Ford.
$1,000 / $50 per share = 20 shares
This calculation of course excludes broker and other miscellaneous fees, which you will be expected to pay upon the execution of your order. Depending on your broker you may pay from $10 to $80 for this transaction. There are a wide variety of fees because there are a wide variety of brokerages from deep-discount online to full service, and each one has its own prices for trading stocks. Selling stocks comprises the same steps. Let's say you've been a lucky investor and your Ford stocks have gone up in value - let's say to $60 per share - and you …
Table of Contents