How to Open a Stock Trading Account

by David Sarokin ; Updated July 27, 2017
You can buy and sell stocks online or through a traditional broker.

If you want to buy and sell publicly traded stocks, you need the services of a brokerage firm. Stockbrokers are licensed to conduct trades on stock exchanges such as the New York Stock Exchange and Nasdaq. There are many firms where you can open a stock trading account. It is important to choose a firm that best suits your trading style.

Step 1

Set aside funds for trading. You have to fund an account at a brokerage in order to purchase stocks, so it is important to decide how much cash you have available for trading.

Step 2

Consider the services you need and the costs involved. Brokerage firms fall into three general categories. Online brokers specialize in providing web-based trading tools with a minimum of personal interaction between a client and a broker, and are the least expensive means of trading stocks. Full service firms establish a client-broker relationship, providing someone you can contact for advice or to initiate trades; most full-service firms also provide online trading. Broker-mediated trades at a full service firm charge a commission based on the size of the trade. Discount brokerages also offer personal service, but generally charge smaller fees than a full service broker. It pays to do your homework. Sites such as Motley Fool and Yahoo! Finance offer extensive guidance on considerations for choosing a broker, comparing the dozens of brokerage firms in each major category.

Step 3

Apply for an account at your selected broker. You can apply online at most firms by clicking "Open an account," "Apply for an account" or a similarly worded link on the company's web page. You have to provide your name and identification information along with your Social Security number and details of your bank accounts. You also need to fund a new account electronically or by sending a check in order to begin trading.

About the Author

David Sarokin is a well-known specialist on Internet research. He has been profiled in the "New York Times," the "Washington Post" and in numerous online publications. Based in Washington D.C., he splits his time between several research services, writing content and his work as an environmental specialist with the federal government. David is the author of Missed Information (MIT Press, 2016), a book exploring how better information can lead to a more sustainable future.

Photo Credits

  • Hemera Technologies/ Images
bibliography-icon icon for annotation tool Cite this Article