How do you open an online trading account?


Quick Answer

To open an online trading account, first research the many available options, such as accounts offered by ETrade and Fidelity investments. Account pricing and features vary considerably, states Forbes. After finding a suitable account, enter your information in the online sign up page, such as your name and Social Security number.

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Full Answer

There are many different types of online trading accounts, and the type an investor needs depends on what he wants to trade, explains Forbes. To trade stocks and exchange traded funds, a brokerage account is required and is often the main account listed by online brokerages, such as ETrade, Fidelity investments and TD Ameritrade. Other accounts, such as traditional IRA accounts, provide tax-deferred savings with deductible contributions, states Fidelity investments. Some brokerages also offer trading accounts with ATM access.

Check the fee structure for each account. Most online brokerage accounts offer fairly low fees compared to traditional full-service brokerages, states Investopedia. Online trading accounts commonly charge per trade. Make sure the account does not charge an extra fee for low balances.

When signing up for a suitable account, you need to supply your name, contact information, Social Security number and employment information, explains ETrade. This information is used to confirm applicant identity. Once your application is accepted, transfer funds from a bank account using the bank account number and routing number.

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