[macfantn]

I have never bought stocks in my life and was thinking of starting small $100 or so on E-trade. Anyone have any suggestions or recommendations?

[wallinbl]

What are you looking to do? Play around or start building a long term investment?

For $100, you're going to have a hard time doing anything. A trade is going to cost you $12.95, which would be a nearly 13% hit right up front. The easiest way to play with small amounts is to do it with options (read about how they work - you might want to stick with buying calls to be safe). Even then, options are bought in chunks of 100, so you'd need enough to cover 100 in order to even buy. They're generally pretty cheap: AAPL is at 169 right now. September calls @ 180 are 1.60 right now, so for $160, you could buy the rights to buy 100 shares of AAPL @ $180 between now and mid September. You don't intend to actually buy the shares, only to sell the call (the right to buy) to someone else after the stock goes up. Say the stock goes up to $174 tomorrow. Your calls would be worth around $2.90 each or $290 for the 100. You sell them and net $130. So, it's a way to play with stocks you can't afford. Downside is this: if AAPL never goes up between now and mid September, your calls slowly go down in value to the point that they're worth nothing. Big upside, downside sucks, but it's limited to what you put in (this downside is actually better than some of the other options trades where there is no limit to how much you can lose).

If you're looking to start building an investment, look at Sharebuilder. You can buy in smaller amounts with a lower fee impact. In this case, look for a low fee ETF index fund and buy what you can afford as you can afford it. Vanguard has some index funds that are very low fee and relatively diversified. Safe, simple and effective.

[Eug]

Total waste of time and money with $100 on E-Trade. And IMO don't bother with options until you're better versed in this stuff overall.

Personally, in your shoes, I'd just get a low MER index no-load mutual fund and add to it incrementally. I wouldn't go for an index ETF, because you run into the problem of transaction fees again. I personally have ETFs, but that's because $10 transaction fees become much less significant when you're dealing with larger amounts.

[turtle777]

Yeah, I second that for that amount, it doesn't make a lot of sense to invest, the fees will eat you alive.

If I was you, I started saving until I had $1,000 - $2,000, and then started investing.

-t

[torsoboy]

Or you may want to start looking at penny stocks/pink sheets. Sure, you could lose it all, but $100 in sub-penny stocks will give you a lot more play than $100 in $160 stocks. Or put your full $100 on Fannie Mae or Freddie Mac, and when they explode again (like they did this week) you'll have another $100 to try.

I personally use Ameritrade to do my stock trading. Haven't trade E*Trade. Trades on Ameritrade are $9.99.

[Big Mac]

Agreed (not about penny stocks though - largely a waste of time and money unless you really know what you're doing). However, macfan, if you choose Charles Schwab instead you can open a Schwab Bank + Schwab One brokerage account with checking and a check card that functions both as a brokerage account ande a bank account without any monthly fees (the only difference is that they don't handle cash at the branches, but you get all ATM fees refunded so you still have cash access that way). Then you can save up while using the account for banking until you have a couple thousand to start learning about investing. I switched to my Schwab account for banking and find it ultra convenient and nicer to deal with than many banks, and you get quality web account service with it. I don't know if E-Trade has a similar service.

[turtle777]

Originally Posted by torsoboy 

Or you may want to start looking at penny stocks/pink sheets. Sure, you could lose it all, but $100 in sub-penny stocks will give you a lot more play than $100 in $160 stocks. Or put your full $100 on Fannie Mae or Freddie Mac, and when they explode again (like they did this week) you'll have another $100 to try.

Oh, my bad, I thought the OP was talking about investing, not playing the lottery.

-t

[torsoboy]

I haven't done options before, but this guide has been pretty enlightening: Option Trading Guide - What are options - Starting stock options It is very easy to understand (except for the put options, which I haven't wrapped my head around yet).

[torsoboy]

Originally Posted by turtle777 

Oh, my bad, I thought the OP was talking about investing, not playing the lottery.

-t

lol

All stocks are the lottery right now. It would serve as a way to learn terminology and how things work, for a lot less money than investing in big value stocks.

[iLikebeer]

Try sharebuilder.com. You can make a purchase for $4. Find someone to send you an invite and split the reward he gets. Sharebuilder is from the same people that do ING Direct.

Or try computershare.com. With them, you can set up direct purchase programs from a company that interests you. You can have dividends reinvested or have a check sent to you each quarter.

Either way, with such a small amount, your best bet is to use one of those 2 sites or another similar one to dollar cost average your purchases over a long period of time and watch how fast such a small amount actually adds up.

[Big Mac]

Originally Posted by torsoboy 

lol

All stocks are the lottery right now. It would serve as a way to learn terminology and how things work, for a lot less money than investing in big value stocks.

You can lose money in any stock - that much is true. But you're even more likely to lose in penny stocks because you're dealing with dicey companies that aren't even regulated in the minimal way that normal equities are. You're also more likely to get suckered into an illiquid stock that gets pumped up by insiders and then dumped. There's a reason why spammers like promoting penny stocks. You can make money in them, too, but it's a very dangerous game.

[Atheist]

Originally Posted by Big Mac 

... if you choose Charles Schwab instead you can open a Schwab Bank + Schwab One brokerage account with checking and a check card that functions both as a brokerage account ande a bank account without any monthly fees (the only difference is that they don't handle cash at the branches, but you get all ATM fees refunded ...

Thanks for the tip!!!! I've been getting raped by charges from my bank (Wachovia) every time I use my ATM/Debit card. Schwab refunds all ATM fees worldwide!

[Big Mac]

Originally Posted by Big Mac 

Agreed (not about penny stocks though - largely a waste of time and money unless you really know what you're doing). However, macfan, if you choose Charles Schwab instead you can open a Schwab Bank + Schwab One brokerage account with checking and a check card that functions both as a brokerage account ande a bank account without any monthly fees (the only difference is that they don't handle cash at the branches, but you get all ATM fees refunded so you still have cash access that way). Then you can save up while using the account for banking until you have a couple thousand to start learning about investing. I switched to my Schwab account for banking and find it ultra convenient and nicer to deal with than many banks, and you get quality web account service with it. I don't know if E-Trade has a similar service.

I just went to my local Schwab branch and have updated information about Schwab banking. They made some changes to how they do it now. If you have a normal Schwab One brokerage account you have check deposit at any local branch, check writing, ATM card, and no-fee ATM access. If, however, you have a Schwab One account plus a high yield bank account, you have access to all of those things but for some reason you can only deposit checks at designated Schwab Bank branches, which only some of them are.

The employee said that due to banking regulations they have to have some bank account services separated from brokerage services, so that's apparently why. Schwab Bank branches can handle cash now, however. This was a recent change. They also installed esignature pads at my non-bank branch to take digital signatures for the purpose of opening bank accounts. It's not shown online which branches are bank branches and which are not, so it seems they're still rolling this new program out. As a result, you may want to stick with your Schwab One brokerage account unless need cash access because you get all of the features of a bank account plus a brokerage account except for having direct cash access at a branch.

By the way, Schwab customer service is U.S. based as far as I know and pretty quick to get on the phone whenever I have called.