How to Make Money Investing in Stock

Open a stock trading brokerage account if you do not already have one. You can do this online, over the phone or by mail.
Know your risk tolerance.
You can make money in the stock market with any level of risk aversion. Knowing your comfort level is going to help you sleep at night when you picks the right stocks for you.
If you don't like risk, stick to the Blue Chips.
If you're up for some risk go for the emerging technology penny stocks.
Set goals.
Having specific goals will help you pick the correct stocks for you. Are you investing for retirement, college, a house, etc?
These goals all have different time lines. You wouldn't pick the same stocks to achieve these different goals.For a long term goal like retirement, think large cap dividend stocks like utilities. And then make sure to enroll them in a DRIP.For shorter term goals like a house, you'll want to focus on more risky growth stocks like the technology sector.
Allocate funds.
Whether it a lump sum or a monthly amount, you need money in your brokerage account. This makes the money available to invest the moment you want it.You can set up an automatic electronic transfer if you're going to invest the same amount every month.
Diversify.
Protect yourself from losing your entire investment by diversifying. This is like buying insurance within the stock market. To truly diversify you'll want to invest in at least 5 different industries or sectors.Auto, retail, food, health care, banks, technology, utilities are all examples of different sectors.
Have an exit strategy-- you don't actually make money unless you sell above what you paid.
Knowing when to get out is the most important step to making money in the stock market.
Whether your exit strategy is based on time, like for retirement or college, or based on profit-- like having enough for a house mortgage down payment -- you need a plan.
Take the money and run.
Once you've achieved your goals, take the money and use it for your lifestyle.

How to Buy Stock on TSX

Decide how you wish to access and control your stock investments. Large financial institutions and banks (e.g. the Royal Bank of Canada and TDAmeritrade) offer stock accounts linked to the individual's general savings account. The bank then manages the investments for the individual and returns the profit in a manner similar to interest or a money market. The contrasting option is opening an investment-only accounts. This generally gives the individual investor more control over buying and selling decisions and is typically the best choice for first-time investors in the TSX.
Create an account with your financial institution (for linked investment accounts) or investment-only account. For the former, contact your banks customer service department to learn how to link an investment account with your current savings account. If you are choosing to buy stocks through an investment-only account, choose an online stock broker. Online stock brokers offer flexibility and discounted rates to individual investors that larger stock broker firms do not. Examples include ING Canada and Questrade Canada. Links to these institutions are included in the Resources section of this article.
Setup a payment plan for your investment account. If it is linked to your savings account, the Canadian bank will simply withdraw funds from your savings. If you have an ING Canada account or similar plan, you will be required to link the investment account to a credit card or bank account.
Research the TSX stocks in which you wish to invest. The TSX is known for featuring a large array of oil- and energy-focused companies, but general consumer and automobile companies are also listed on the TSX. Consult a financial adviser or solicit recommendations from a fellow investor on which stocks historically perform well.
Invest in TSX stocks and track your progress. Like all stock markets, the value of the TSX can fluctuate widely within the perimeters of a single, 24-hour day. Be vigilant and understand the inner mechanisms of a stock market by reading guidebooks and taking financial seminars. The more educated you become, the better your TSX stocks will perform.

How to Calculate Stock Basis for Exercised Options

Receive notification from your brokerage that an option has been exercised. This will most likely come in the form of a trade confirmation the day after option expiration. If an option is 'In-The-Money' by even one cent, the option will be exercised.
Determine your initial cost in the stock. This will be the share price you paid to buy the stock for the first time.
Adjust your cost basis by calculating the total option premiums you have collected against the stock. Keep in mind that options which expired previously without being exercised also reduce your basis in the stock.For example, let's say you bought 100 shares of XYZ in January for $10 per share. You then sold the February $12.50 call option and collected a $1 premium, lowering your basis in the stock to $9 per share. On option expiration day in February, the stock is $11 per share, so the option expires worthless. You decide to sell a March $12.50 call, and this time you collect a $2 premium, lowering your overall basis to $7 per share.
Calculate your profit or loss. If an call option is exercised at a strike price higher than your basis in the stock, you have made a profit. To calculate the profit, you must subtract your basis in the stock from the strike price of the option.To use our earlier example, on option expiration day in March the stock is $13 per share. The option you sold is exercised at its strike price ($12.50). Your basis in the stock is $7. Therefore, $12.50-$7=$5.50 profit per share on the trade.If an option is exercised at a strike price below your cost basis, you have a loss. To calculate the loss, subtract the strike price from your basis in the stock.
Calculate your tax basis. For tax purposes, your basis in a stock also includes all the commissions and fees you incurred during the trade. The easy way to calculate that is to add up all the commissions and fees and divide the total by the number of shares you own.

How to Calculate Stock Averages

Add the total value of stock purchased on each stock ticket. This should be on your statement or ticket. If you don't have this, take the number of shares and multiply this to the price paid per share. For example, if you purchased 100 shares of XYZ stock at $15 per share, this would be $1500.
Add the total value of each purchase together. Assume you bought XYZ three times, each time purchasing 100 shares. You paid the following prices: $15, $10, $12. You would then have spent: $1500 + $1000 + $1200 = $3700.
Add the total number of shares you have purchased. For example if you bought 100 shares of XYZ stock three times, then you would have 300 shares total.
Divide the total dollar value spent by the total shares purchased: $3700/300 = $12.33/ per share.
You might need to consider the cost per transaction paid. If you are paying a commission for buying the stock, then add the commission price into the total amount spent before dividing it by the total number of shares. If you want to know your break-even price, add the estimated sales commission to the total dollar value as well. For example, if you spent $8 for each of the three trades, then: $3700 + $8 + $8 + $8 = $3724 for the total purchase price. If you will spend $8 on the sale, then your total would be $3732 / 300 shares = $12.44 for your break-even price.

How to Read a Stock Ticker

Identify the ticker for your stock exchange. Financial websites and television stations may have multiple scrolling tickers. Business television stations may have up to three tickers displayed at one time.
Look for the company name, which is the first part of the ticker. If there is no company name, look it up using the stock symbol.
Read the stock ticker symbol, which is usually one to four letters long. NYSE stock symbols consist of up to three letters, while NASDAQ stock symbols consist of four letters. Some stock symbols may contain extensions, such as '.A' for a Class A stock or '.B' for a Class B stock. Class A shareholders typically have more voting rights than Class B shareholders.
Read the last-trade information, which may be of the format 'volume @ price.' For example, '14K @ 20' means the last trade was 14,000 shares at $20 each. The letters 'K' and 'M' mean 1,000 and 1 million, respectively.
Examine the price-change information, which consists of an up or down arrow and an amount. The arrows indicate whether the price has moved up or down since the last trading session and the amount indicates by how much. Some stock tickers may use color codes to indicate up and down price movements.

How to Buy Direct Stock Without a Broker (4 Steps)

Find out if a company you are interested in offers a direct stock purchase plan. Companies offering DSPPs feature them in the Investor Relations section of their websites. Alternatively, you can check transfer agent companies like ComputerShare and Sharebuilder, who have lists of the companies for which they manage DSPPs on their websites.
Open an account with the company's transfer agent. You can either call the transfer agent and request a paper application or apply online. There is a one time fee to set up a DSPP to buy direct stock without a broker that ranges from $10 to $25, depending on the stock. The minimum investment is usually $250 or $500.
Arrange to have monthly investments automatically deducted from your checking or savings account. You can make your investments by check. However, if you use electronic funds transfer the transaction fees are lower--just $1 to $3 per transaction, pus 3 to 5 cents per share. Another advantage of using electronic debiting is that you can meet the minimum investment requirement with monthly installments of $50. Once you have invested the minimum you can add more when you wish, as long as additional investments are at least $50 each. Some companies, like Exxon Mobil, even pay the transaction fees for stock purchases so all of your money goes directly towards purchasing stock.
Choose the plan features that suit your needs. Most DSPPs provide free dividend reinvestment and safekeeping storage of your stock certificates. You can set up a direct stock purchase plan as an Individual Retirement Account (IRA). Some companies add special features. For example, McDonald's has a program in which a minor can start a direct stock purchase plan for their stock for as little as $100.

How to Choose Stock Charting Software

Learn how to read stock charts. Some software has built-in alerts that make it super-simple to play the stock market. Others have less bells and whistles and more tracking power; some of these may rely solely on graphs to let you know what's going on. Many types of software will assume that you already know how to read stock charts.
Pick your preferred software version. Do you want the free online version, or would you rather pay for something with a little more muscle? Many first-time stock market players prefer to get their stock charting software for free during their learning period. Bigcharts.com and Stockcharts.com are just two examples of reliable sites that will get you up and running in no time.
Customize your chart to fit your needs. No matter which model you choose, a good chart will have lots of menus and tabs to help you tailor the program to your exact needs. Take advantage of this tool to make sure that you are getting the most out of your stock charting software. Your chart will let you select specific stocks to track and pick a time frame for each one (weekly, daily, hourly, etc.) You can also change the colors on everything in the chart to make it easier for you to follow. You can modify the way the chart presents itself (do you want a bar graph or a line graph?) and many other things.
Use the extras. If you think you need more information, the stock charting software will have every imaginable option. You can track several aspects of your stock on the same graph, follow its performance history, set up alerts and indicators to predict its future direction, and get live streaming quotes from your broker.
Last but not least, it's important to learn how to read all of this information in order to make your pick. And thanks to the user-friendly stock charting software that is now widely available to so many people worldwide, before you know it you too will be playing the stock market like a pro!
While you're here be sure to take a look around for more tips and information about the stock market.

Selling Stock Certificates (9 Steps)

Look up the stock symbol. This is as simple as visiting Yahoo! Finance and typing in the name of the company. Click on “Symbol Lookup.”
Get a quote on the stock. Again, a visit to Yahoo! Finance will give you the current quote on the stock.
Determine how many shares of stock you have. This may be a little more involved than you think. First, the number of shares is printed on the face of the certificate. Multiply that number by the current share price to determine how much it is worth. However, your certificate may be worth more or less than that and more research is required.Often over an extended period of time, the stock of a given company will split forward or in reverse, multiplying the number of shares or dividing the number of shares by a given factor. For example, if you have a certificate for 100 shares of XYZ stock from 50 years ago and the stock has split 4 for 1 in the meantime, that 100 share certificate now represents 400 shares. Conversely, if XYZ went through a 10 for 1 reverse-split in the same time frame, your 100 share certificate would now represent 10 shares.The easiest way to determine how many shares your certificate represents is to call the transfer agent and give him the CUSIP number from the back of the certificate. You can find the transfer agent for any company by calling the company themselves or looking it up in the SEC documents relating to the company. The CUSIP (Committee on Uniform Securities Identification Procedures) number is a nine-digit alpha-numeric number located on the back of the certificate that the transfer agent will use to determine the exact number of shares.
Make sure the certificate is in your name. Your name must appear on the face of the certificate. If it does not, you will have to contact the transfer agent, prove the stock belongs to you, and request a new certificate to be issued in your name.The only time this is not necessary is when the certificate is signed on the back by the person named on the face of the certificate. A signed certificate is as good as cash, so be careful with it. Literally anyone who picks a signed stock certificate up on the street can cash it in. It is the same thing as a signed check.
Sign the certificate and deposit it into your brokerage account. Remember, once signed a stock certificate is as good as cash. If you don't have an open brokerage account, most local discount brokers will allow you to open a temporary account for the one-time disposition of stock certificates. Charles Schwab is one of the companies that offer this service.



Determine if the certificate is worth anything. Some are not. Some certificates are considered collectibles because they represent shares in companies that were famous at one time. Others are collectible because they represent shares in companies that were social oddities. An example of this would be stock certificates from The Mustang Ranch, a legal Nevada brothel shut down by the IRS in 1999, or shares in the Playboy Corporation, whose certificates had a pin-up girl on their face.To determine the potential value of your certificates, do some research on the Internet and call a few collectors. A link is provided in Resources below.
Sell to a collector. This may be the easiest way to sell an old stock certificate. Agree to a price up front and sell the certificate to a private collector.
Sell the certificate by auction. There are several collectibles auction houses available if the certificate is worth enough. Otherwise, there is always eBay.
Donate the certificate. If you don't need the cash and could use a tax deduction, donate the certificated to charity and let them handle the sale of it. You'll get a write-off and the money will go to a good cause.

How to Read a Stock Certificate

Look for a box with the word 'number' in it. The number uniquely identifies the certificate and is used to track ownership. Often there are two or more boxes with the number on the front of the certificate. The CUSSIP number, assigned by the Securities Exchange Commission (SEC), is also printed on the certificate. It identifies the stock as a security registered with the SEC. Confirm the type of stock the certificate represents by looking for the words 'preferred' or 'common.' The type of stock determines shareholder privileges such as voting rights and the amount of dividends received.
Feel the embossed corporate seal and read the name of the company. The name and seal may change over time as companies merge or acquire one another. The state the company incorporated in is often included near the name. Since certificates represent ownership, some companies add attractive pictures, logos or designs to represent the organization. Collectors frame and gift stock certificates, not for the value of the shares, but the design on the front.
Learn the owner of the certificate by reading the shareholder's name. The owner is as of the date printed near the name. If the shareholder were to change names (after marriage for example), either the certificate would be reprinted with the new name or a stock power identifying the old and new names would be necessary to sell the certificate.
Determine the number of shares the certificate represents by reading the number printed next to the name or in a box marked 'shares.' Certificates used as gifts or purchased by collectors often represent only one share. In this case the share amount is listed multiple times one after another as a matrix. The number of shares printed may become inaccurate as the result of stock splits. To determine if this is the case, compare the date on the certificate to company the stock's split history. Certificates can be reprinted with the adjusted number of shares.
Understand the par value of the shares by reading the 'par value' amount. The issuing company assigns this amount at the time the certificate is issued. The current market value of the shares is determined by its most recent buy and sell prices on the exchange where it is traded.
View the back of the certificate to determine if it has been endorsed, transferring ownership of the stock to either another person or to a brokerage firm to convert to electronic ownership. The form includes a space for the original owner to sign and indicate the new owner.