The Stockbroker

Goes through training and testing to become a registered representative of the NASD

Can provide advice Follows various industries and companies to

compile investment information

Let the Buyer Beware

A full-service stockbroker is a salesperson first and an advisor second

The broker ultimately has to sell the product to you

Placing an Order

Verbally over the telephone

Through touch-tone automated system

Over the Internet

First Basic Kind of OrderMarket Order

You want to buy or sell a certain number of shares of stock at the best current available price and you assume your order will be executed as soon as possible.

Second Basic Kind of OrderLimit Order

You want to buy or sell when the stock reaches a certain price. You will not buy or sell if the specified price is not reached

Third Basic Kind of OrderStop Order

Your order to buy or sell at a specific price changes to a market order when the specific price is reached

Types of Accounts

Cash accounts Required to pay for your stocks

purchases within 3 business days of your order

Especially useful for beginning investors

Margin accounts You are actually borrowing money to

purchase stocks Should be an experienced investor

Selling Short

Margin accounts are sometimes known as selling short Investor is selling borrowed stock Will pay for it later Betting price will drop between

the time of sale and the time of purchase, so he can pocket the difference If the price rises, he loses money