How to Buy Shares on the Internet
- 1). Determine if you need a full-service broker, or a discount one. If you have confidence in making your own trading decisions then you may want to open an account with a discount broker. Discount brokers take a hands-off approach with their customers, allowing you to trade less expensively. If you are accustomed to receiving help with buying shares and getting advice on investment decisions, then creating an account at a full-service broker may better serve your needs.
- 2). Compare commission rates for trading shares. Many online brokers will have commission rates posted on their homepage. In some cases commissions are priced on a sliding scale--the more shares you buy, the less you pay for each. Always look beyond the "advertised" rate for details that may not seem so appealing after further review.
- 3). Examine the broker's fee structure. Any reputable broker will have a link you can easily locate that will take you to a complete schedule of fees. Common fees to look for are account inactivity charges, fees for having a small account balance, transferring money, or flat service and maintenance charges. Full-service brokers have licensed customer service representatives to assist you and usually charge extra fees for lending a hand with your decisions.
- 4). Analyze the various trading tools provided by online brokers. Almost all companies have real-time streaming quotes, but the way they are presented can vary. Look for screenshot examples of how the companies' trading windows are arranged. Having access to streaming charts and quotes on the same page where you can actually buy shares is very convenient, especially if you plan to make trades based on small moves in prices. Many online brokers have numerous ways you can research an investment before you buy and even provide educational tools to traders. If you plan to trade on the go, make sure you can access the broker's trading features via a mobile device.
- 5). Research online brokers' customer service ratings. Find third-party customer reviews of a broker before you open an account. Important customer service points include phone response times, how quickly a broker will return email to help resolve issues, and how knowledgeable company representatives are. Even if you do not plan on using assistance to buy shares, it is good to know what you can expect if you ever do find yourself in a situation where contacting the company is necessary.
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