new to stock market

Discussion in 'Trading' started by light12, Nov 21, 2017.

  1. light12


    hi im new to stock and after reading some information on firstrade i still cant understand the meanings and there is a lot more rules in stock that i didnt know about please if there is some one to describe me better more in details
    here is one of them

    Common Stock & Preferred Stock
    There are two main types of stock: common and preferred. Common stock usually entitles the owner the right to vote at shareholder meetings and to receive dividends that the company has declared. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event a company goes bankrupt and is liquidated.

    Preferred stock is largely owned by institutions and corporations because provisions in the tax laws allow dividends that they receive from preferred stock to be largely tax-exempt. In contrast, dividends on preferred stock received by individual investors are fully taxable. Since most of the demand for preferred shares comes from tax-advantaged buyers, who receive a higher after-tax yield, such stock is typically less attractive than other forms of investments for individuals.​

    which one is better after all i can't tell the difference is it big deal to choose between them ?
    where can i find the full list of preferred and common stock
  2. light12


    do i need to wait everytime for purchase date + 2 business day for profit and cash account get settle then buying back the price ?

    Completing a Trade
    What happens after an order is executed? From the point of view of the investor, you will simply see that the funds have been deducted, and the stock purchased now appears in your positions. For the brokerage firm and clearing firm, a complicated procedure takes place to move your money to the seller, and to obtain possession of the stock purchased. The process for a trade to "settle" usually takes 2 business days. This means that if you wish to sell the stock, you must wait for purchase date + 2 business day before you can place a sell order. Conversely if you sell a stock you must wait 2 business day to use the proceeds of the sale.

    Good-Faith Violation
    Good-faith violations occur when the purchase of a security uses funds that have yet to settle in the account. Each account is allowed to have up to 3 good-faith violations per 12 month rolling period before the account is put into a 90-day restriction on the 4th strike of a violation. Each good-faith violation will automatically expire after 12 months from the violation date (T/D Date).

    90-Day Restriction
    Once the account is placed under a 90-day restriction, the account can only use settled funds to place a buy order. The following are some instances when an investor's account will be restricted:

    • When an account triggers a good-faith violation for the 4th time within 12 months.
    • When an investor makes day trades using unsettled funds. View scenario
    • When an investor sells securities before fully paying for those securities. View scenario
    Last edited: Nov 21, 2017
  3. These are really more investing questions than trading questions. For the settled funds question, a margin account (whether you utilize the margin or not) moots the question. For the first, maybe investopedia?

    But you'll get better answers somewhere that caters to investors rather than traders. If you're in fact asking with the intent of truly trading, the answer is get a margin account, and stick to the more liquid (usually common) shares because the tax / rights aspects of it don't really factor into trade decision making.
    light12 likes this.
  4. light12


    hi beerntrading
    im going buy and hold and compound this is all i want do
    thanks for the information im getting clear after i reading more about it
    where can i find the list that says its a common shares or preferred ? i couldn't find googling it
    and , do you know how is it taxes for foreigner outside US ? if you address me some source that i can read or a topic , appreciate it man
    Last edited: Nov 22, 2017
  5. light12