1. Can i begin investing with $1000 at a big firm like Fidelity?
2. Can i buy pink sheet or OTC stock or any penny stock for that matter with Fidelity?
three. Will i be, in any way, restricted to the quantity of shares i can buy at a time? For Example, Can i buy $1000 of Stock A at $.10/share equaling 10000 shares. Can i buy $1 million of stock? Or am i limited?
four. Can i buy at any time? Sell at any time? How Precisely does this work? I would like to make a trade utilizing the computer. When i say SELL… Will it be sold ASAP? Could it take days? Can i set up a quit loss by computer or do i have to talk with a individual?
five. Taxes on Gains? From what i comprehend, any gains inside a year must be taxed as brief term capital which is the highest. Is this 33%? And the long term capital is how a lot? and is it considered long term “exactly” 1 year from time of buy of the stock?
Thank you for your help?
December 9th, 2009 at 4:15 pm
short term gains at taxed at YOUR top tax rate, very few people are at 33%
one year is one year – buy Jan 7 2010, sell jan 7, 2011 – long term, sell Jan 6, 2011 or earlier, short term
you are dreaming if you think you are going to make 500% in less than 20 yrs TOTAL
December 10th, 2009 at 5:22 am
1) Yes you can, but make sure to look at the minimum amount to open an account. Some are $500, others are as high as $10,000
2) As long as the stock is traded on a US exchange, you should be able to buy it.
3) You are only limited to a) how much money you have in your account, and b) the number of shares someone is willing to sell at your price. You might be willing to buy 1 million shares, but if there are not 1 million shares waiting to be sold, then your order will not go through.
4) See #3. The HUGE downside with penny stocks is that there are not many traders available. Say you buy 1 million shares or a penny stock for .10. Then that stock jumps up to $1 making you a 1000% profit. The ONLY way you can sell those 1 million shares is if there is a BUYER for that many shares at $1. You have to think of the stock exchange as a market. If no one is willing to buy your shares off of you for the price you want, your sell order will not go through. For every sell, there MUST be a buyer on the other end. For every BUY, there must be a seller willing to sell at that price. You can do a stop loss by computer.
5) Short terms capital gains are taxed at YOUR highest tax bracket. They are treated as additions to ordinary income. If you are in the 25% bracket, then they are taxed at 25%. Long term gains are currently taxed at the lowest tax bracket (10%). However this will probably change soon as Obama will need an income sourse to pay for his Obamacare plan. Yes, long term is anything held OVER 1 year.
December 12th, 2009 at 10:44 am
If you are trying to get a 500% return in a year or less, then your expectations are wildly out of line, and you will undoubtedly plunk your money down on a gamble, lose it all, and then blame the market for your loss.
Take a little bit of that $1000 and spend it on a couple of good investment books first; or just study some of the free good advice at or similar web sites.
1. Can i start investing with $1000 at a big firm like Fidelity?
– Yes but you would probably be better off at a discount site like TDAmeritrade or ETrade or Interactive Brokers.
2. Can i buy pink sheet or OTC stock or any penny stock for that matter with Fidelity?
– The only reason a novice should dive immediately into pink sheets or penny stocks is so that you can lose your money even quicker.
3. Will i be, in any way, restricted to the number of shares i can buy at a time? For Example, Can i buy $1000 of Stock A at $.10/share equaling 10000 shares. Can i buy $1 million of stock? Or am i limited?
- With $1K, if you do not have a margin account, you will be limited to buying $1K worth of stock less the commission. I do hope — for your sake — no one gives you a margin account. And even if they do, you won’t be able to buy $1M of stock with it.
4. Can i buy at any time? Sell at any time?
– You can enter orders at any time. When the orders are acted upon depends on which exchange your stock is listed on.
I would like to make a trade using the computer. When i say SELL… Will it be sold ASAP? Could it take days?
- With highly liquid stocks, a plain market order will be executed immediately (assuming the market’s open); with less liquid stocks, or with limit orders (etc.), it may take a while to match your order. Here is a discussion of order types from Interactive Brokers:
Can i set up a stop loss by computer or do i have to talk with a person?
– Any online broker will enable you to enter stop orders online.
5. Taxes on Gains? From what i understand, any gains within a year must be taxed as short term capital which is the highest. Is this 33%? And the long term capital is how much? and is it considered long term “exactly” 1 year from time of purchase of the stock?
–Both short and long term gains are taxed according to your tax bracket, but yes, the long term gains are taxed substantially less. See this discussion:
December 12th, 2009 at 6:34 pm
1-Yes
2-Yes
3-Yes
4-Yes – Fidelity has an extensive, very professional platform- They have a very professional order routing system extended to all major markets. Stops can not always be placed on unregulated markets, but the firm can maintain stops on their open order file
5-Taxes on the sale of securities are incured in the year in which the order was executed. Yes it is one year but your record keeping must be consistant on a trade date/record date basis. The current tax rate is determined by your pesonal income and my be changed by this congress, and such changes may be retro active always consult with your tax advisor and never use a public site such as YA for this advice.
It appears that you are looking to trade penny stocks, most major reputable firms (like Fidelity) do not encoureage investing in or trading such securities and will do whatever to discourage such activity and rightly so.