10 Tips for Online Investors

Before You Invest - Get the Facts:

1. Online trading is not for everyone. Understand the differences between online trading and using a full service brokerage firm to make trades. Which service best suits your needs?

2. Know the costs. What commissions and fees does the online firm charge? What conditions apply to these rates? Compare these fees to the costs of using a full service broker.

3. Know what to do if there are outages, delays and other interruptions that prevent trading or account access. Many online firms provide other methods to trade during periods when a capacity problem arises.

4. Trades are not instantaneous. Most online firms do not allow customers to directly link to the market. Check out the firm’s advertised claims concerning the speed of online trading.

5. Know how to enter orders. Ask the firm to explain the differences between market, limit and stop loss orders. How will you know that a trade has been executed?

6. Know how to cancel an order. Ask the firm to explain when and how you can cancel an order. How will you know when a trade has been cancelled?

7. Know about trading on margin. Investors should be aware that if a margin account declines in value the brokerage firm could sell securities in the margin account before advising you.

8. Ask to see the firm’s privacy and Web site security policy. Will your name and address be provided to or used by any other party?

9. Know who to call for help. Know how to, and if necessary, contact a customer service representative with your concerns and request prompt attention and fair consideration.

10. Check out the brokerage firm with the Missouri Secretary of State’s Office, Securities Division.

The Division can (1) check the registration status of the firm; (2) provide background information about the firm, including any disciplinary history; and (3) check the registration of any security being offered in the state. In addition, if you have a grievance about a stockbroker or brokerage firm you can file a complaint with the Division.

Robin Carnahan, Secretary of State
Securities Division
600 W. Main Street
PO Box 1276
Jefferson City, MO 65102
(573) 751-2061

Toll-Free Investor Hotline
(800) 721-7996