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Street Authority
06-26-2014,
What is the best strategy for someone who can only afford to start out with <$500?

It seems like commissions kill you unless you invest a lot. Even for a discount broker like trade king at $4.95.

That's

4.95x2 = $9.9 rounded to $10 that's a 5% loss if you invest $500. It's even worse if your broker is TD Ameritrade (which I use... for the tools mostly) where I spend $20 just on commissions. I've looked into penny stocks but the risk seems scary especially for a beginner (I have about a year of experience and I've done a lot of simulated trading.)


I also looked into margin, but most firms require at least $2,500. Some even require $10,000. Heck some firms won't even let you open a CASH account with less than $500.

SwingKong01
06-26-2014,
There is a federal minimum requirement for margin accounts. I thought it was 2k$. There isn't much you can do w/ 500 without the fees eating you up pretty good. Maybe keep saving and work your td ameritrade paper trading account on thinkorswim to keep engaged and see how well you do with that.

HarryAloof
06-26-2014,
May want to have a look at SureTrader. It's in the Bahamas and can get you around the PDT rules. It's not for everyone, but I have clients who use them and like the freedom it gives them on smaller accounts. 6 to 1 leverage to give you $3k buying power off $500. Of course if you lose more than $500, well you owe them.... Margin is risky especially if new to trading. So while having a SureTrader account and access to the leverage, doesn't mean you have to use it.