Bee
Now i gotta make my portfolio... boy i feel like donald trump already.... :S
Does he have anythin to do with this? or did i just make myself sound stupid?
Edit: What the hell do i do now? lol sorry for sounding like a noob
1. No, Donald Trump has nothing to do with the Virtual Stock Exchange. It is a free service provided my Marketwatch.com for users to be able to learn how the stock market works without sacrificing real dollars.
2. No, you did not just make yourself sound stupid. It was a legitimate question.
3. First, locate a stock that you may be interested in purchasing. After you've found the stock you are interested in purchasing, locate the stock's "stock symbol". Usually 1, 2, 3, or 4 letters long. Sometimes 5, but 5 letter symbols are mostly reserved for mutual funds -- which you can also buy via the VSE. However, you're better off sticking to individual stocks.
Once you have the symbol, assuming you are still logged into the portfolio, click on the "TRADING" tab. Once there you should see a myriad of radio buttons, drop down menus and text boxes. I'll try to explain to everyone what they all mean.
First, we have the transaction section:
Buy -- Allows you to BUY a stock or mutual fund.
Sell -- Allows you to SELL a stock or mutual fund.
Sell short -- Allows you to short sell a stock. Short selling involves borrowing shares from a broker at a high price in the hopes that the stock will drop.
Buy to cover -- Allows you to buy back the shares of stock that you have sold short.
DETAILS: If you buy a stock you want the price to INCREASE in order to make money. For example, if you buy 100 shares of XYZ at $35/share and then sell it at $40/share, you've just made a $5/share profit (less commissions). $5/share * 100 shares = $500!
DETAILS: If you sell a stock short you want the price to DECREASE in order to make money. For example, if you short 100 shares of XYZ at $40/share and then buy to cover at $30/share, you've just made a $10/share profit (less commissions). $10/share * 100 shares - $1000!
Next, we have the symbol section:
Simply type in the companies "stock symbol".
EXAMPLES:
Dell Inc. =
DELL
Ford Motor Co. =
F
Honda Motor Co. =
HMC
XM Satellite Radio =
XMSR
Scientific Atlanta =
SFA
Genentech =
DNA
These can be found using a simple search called "Symbol Lookup" on Yahoo! Finance.
Next, we have the shares section:
Simply type in the number of shares you wish to purchase.
Next, we have the price section:
When the US markets are open, you will see the following options:
MARKET
MARKET OPEN
MARKET CLOSE
LIMIT
STOP
A
market order is an order to purchase shares of stock at the current market prices. For example, if XYZ is trading at or around $35/share you will either buy or sell XYZ at or around $35/share.
PROS: Fastest orders so you can get into and out of stocks quickly
CONS: Depending on the market conditions, you will end up buying or selling at unfavorable prices (i.e. buying too high or selling too low).
A
market open order is an order to purchase shares of stock at the market open prices. For example, if XYZ's opening price is $36.87 you will either buy or sell XYZ at EXACTLY $36.87.
PROS: You don't have to be at the computer at exactly 9:30am New York time to make the order go through -- it'll do it for you.
CONS: If the open price is lower than where you bought the stock, you will lose money.
A
market close order is an order to purchase shares of stock at the market close prices. Similar to a market open order, the only difference is time in which it is executed (i.e. 4:00 pm New York time as opposed to 9:30 am New York time).
PROS: Same as above, but only for 4:00 pm
CONS: Same as above
A
limit order is an order to buy or sell a predetermined amount of shares at a predetermined price. For example, if XYZ is trading at $40/share and you wish to purchase it at $37/share, rather than waiting in front of the computer for the price to drop, simply enter a limit of $37/share and if/when the price reaches that point the shares will be purchased at exactly that price or LOWER.
Conversely, if XYZ is trading at $37/share and you wish to sell it at $40/share, you can enter a limit order for $40/share and if/when the price reaches that point, the share will be sold at exactly that price or HIGHER.
A
stop order is an order to buy back shares sold short or sell shares that you've bought at a specific level to avoid catastrophic losses. For example, if you short XYZ at $35/share you will lose a lot of money is the price goes up to $40/share. However, if you have a stop order in place at $36/share you've limited your losses to $1/share instead of $5/share. Conversely, if you buy XYZ at $40/share and it drops to $30/share, you will lose $10/share. However, if you have a stop order for $38/share, you will "only" lose $2/share.
Finally, there is the term section:
Here you have 2 options available:
Day order -- Any order to buy or sell a stock that
automatically expires if not executed on the same day the order is placed.
Good till cancelled -- An order to buy or sell a stock at a set price that is
active until the investor decides to cancel it or the trade is executed.
Here are a few examples of possible orders:
BUY -- AMGN -- 100 -- Market -- Day Order
SELL -- XMSR -- 200 -- Limit ($35.89) -- Good till cancelled
SELL SHORT -- DELL -- 100 -- Market -- Day Order
BUY TO COVER -- DELL -- 100 -- Limit ($34.50) -- Good till cancelled
SELL -- MSFT -- 200 -- Stop ($23.50) -- Good till cancelled
BUY - MSFT -- 200 -- Limit -- ($24.50) -- Day Order
Anything is possible! However, don't bother doing a Market/Good till cancelled order -- it automatically executes anyway!
