A Beginner's Guide To Trading With Ally Invest

Ally Invest is a good low-cost broker for beginner and intermediate investors. It offers $0 account minimum and $0 trading commissions on eligible U.S. securities, making it a strong option for all traders.

To get started with Ally Invest, you'll need to open a brokerage account. This can be done through the Ally app, and you'll need your Social Security or tax identification number and a U.S. residential street address.

Once you have an account, you can start buying stocks. You can do this through the app or on the website. You'll need to enter the number of shares you want to buy, the ticker symbol, the type of order, and whether you want the order to be good for the day or until cancelled.

Ally Invest also offers a range of tools and resources to help you make informed investment decisions, including calculators, screeners, and alerts.

How to open an Ally Invest account

Ally Invest is a good low-cost broker for beginner and intermediate investors. It offers a basic trading platform and app, $0 account minimum, and $0 trading commissions on eligible U.S. securities.

Go to the Ally Invest website

To open an Ally Invest account, you will need to go to the Ally Invest website and fill out a registration form. The online application takes about 20 minutes to complete.

Provide your personal information

You will need to enter your personal information, such as your name, email address, Social Security Number, and phone number. You will also need to provide employment information.

Choose an account type

Ally Invest offers different types of accounts, including Self-Directed Trading, Robo Portfolio, and Personal Advice accounts. The type of account you choose will depend on your investment goals, risk tolerance, and trading preferences.

Verify your identity and residency

As part of the account opening process, you will need to provide documentation to verify your identity and residency.

Fund your account

Once your account has been verified, you will need to fund your account before you can start trading. The minimum deposit at Ally Invest is $0, but certain types of accounts have minimum deposit requirements. For example, Self-Directed brokerage margin accounts require a $2,000 minimum deposit, while Robo Portfolios require a $100 initial minimum deposit.

You can fund your account by transferring money from a bank account (ACH transfer), requesting a wire transfer, transferring from another broker, or sending a check.

Start trading

After your account is funded, you can start trading through the Ally Invest website or mobile app.

Opening an account with Ally Invest is a straightforward process that can be completed in a few simple steps. By following the above instructions, you can quickly set up your account and begin investing.

How to use the Ally Invest trading platform

Ally Invest is a good low-cost broker for beginner and intermediate investors. It offers commission-free trades on eligible U.S. stocks, options, and exchange-traded funds, with no account minimum. Here's a step-by-step guide on how to use the Ally Invest trading platform.

Step 1: Open an Account

To get started with Ally Invest, you'll need to open an account. You can choose between a standard brokerage account and an IRA. During the sign-up process, you'll need to provide your Social Security or tax identification number and a U.S. residential address.

Step 2: Fund Your Account

Once you have opened your Ally Invest account, you'll need to fund it before you can start trading. You can transfer funds from a linked bank account or deposit funds using a check or wire transfer.

Step 3: Research and Select Your Stock

Ally Invest provides a suite of tools to help you research and select stocks. You can use the TipRanks Smart Score tool to analyze stocks and get an easy-to-read rating. Additionally, you can use the ETF Screener to analyze and compare ETFs. It's important to do your research and consider the company's reputation, financial health, and future prospects before investing.

Step 4: Place Your Order

After you've decided on the stock you want to buy, it's time to place your order. Log into your Ally Invest account and select "Trade" or "QuickTrade" on the desktop. Enter the stock symbol (ticker), the number of shares you want to buy, and preview your trade tickets before submitting your order. You can also place orders via the Ally mobile app.

Step 5: Monitor and Manage Your Investments

Ally Invest offers various tools to help you monitor and manage your investments. You can set up alerts, use the profit-and-loss calculator, and access real-time streaming quotes and data. Additionally, the Maxit Tax Manager helps identify the tax implications of your trading decisions.

Key Features of Ally Invest:

• Low trading costs: $0 commission on eligible U.S. securities and a low options contract fee of $0.50 per contract.
• Instant money movement between Ally savings and brokerage accounts, allowing you to take advantage of higher interest rates.
• Extended trading hours from 8:00 a.m. to 5:00 p.m. Eastern.
• Access to a wide range of investment options, including stocks, ETFs, options, bonds, and thousands of no-transaction-fee mutual funds.

Remember, investing carries the risk of loss, so it's important to do your research and understand the risks involved before placing any trades.

How to buy your first stock

Step 1: Open a Brokerage Account

To buy your first stock, you'll need to open a brokerage account. You can use an account like Ally Invest's Self-Directed Trading account, which has no minimum deposit required to open a Self-Directed brokerage cash account.

Step 2: Do Your Research

Once you have opened a brokerage account, it's time to research your stock. You can use the TipRanks Smart Score tool within your Ally Invest account to analyze stocks and give each an easy-to-read rating. You can also do your own research by looking at financial statements, market trends, and industry outlooks.

Step 3: Make Your Purchase

Once you've made your selection and are ready to buy, log into your account. You can usually buy a stock on a brokerage's website or via a mobile app. Within the Ally app, for example, you'll select Trade (or QuickTrade on desktop), enter the stock symbol and quantity of shares, preview your trade tickets, and submit your order.

Step 4: Consider Diversification

As you explore investment opportunities, keep in mind that diversification is crucial to managing risk. In addition to stocks, consider rounding out your portfolio with ETFs and mutual funds, which are not based on the success of a single stock.

Step 5: Be Mindful of Taxes

When you sell a stock or mutual fund for more than you paid for it, the result is a capital gain, which is subject to capital gains taxes. The amount of time you owned the investment before selling it will determine how much you pay in these taxes. Consult with a tax professional if you have specific questions.

Step 6: Monitor Your Portfolio

After you've made your first stock purchase, continue to monitor your portfolio to evaluate its performance. Staying informed about market trends and economic indicators will help you make smart and successful investing decisions over the long term.

How to sell your first stock

Selling your first stock on Ally Invest is a straightforward process. Here's a detailed, step-by-step guide on how to do it:

• Open an Ally Invest Account: If you haven't already, you'll need to open an Ally Invest account. This process is simple and can be done online. There is no account minimum required for a Self-Directed brokerage cash account, but a brokerage margin account will require a $2,000 minimum deposit.
• Fund Your Account: To start trading, you'll need to add money to your account. The faster you fund your account, the sooner you can begin.
• Research Your Stock: Before selling, it's important to understand the stock you're selling. Research your stock by reviewing financial reports, such as those filed with the U.S. Securities and Exchange Commission (e.g., 10-K and 10-Q reports). You can also use the tools within your Ally Invest account, such as the TipRanks Smart Score tool and the ETF Screener.
• Log into Your Account: Once you've decided to sell, log into your Ally Invest account. You can do this through their website or mobile app.
• Select the Stock and Enter Details: Within the app, select "Trade" or "QuickTrade" on the desktop. Here, you'll enter the stock symbol (ticker) and the number of shares you want to sell.
• Preview and Submit Your Order: Before finalizing, carefully preview your trade tickets. Ensure that all the details are correct, including the number of shares and the stock symbol. Then, submit your sell order.
• Understand Taxation: When you sell a stock, there may be tax implications. Consult with a tax professional to understand how capital gains taxes apply to your specific situation.
• Consider Diversification: Selling your stock may be an opportunity to diversify your portfolio. Consider investing in ETFs or mutual funds, which are not tied to the performance of a single stock.
• Avoid Excessive Day Trading: Be mindful of the frequency of your trades. Day trading (buying and selling the same stock on the same day) can lead to additional regulations and requirements. It's generally recommended to avoid or limit day trading, especially if you're new to investing.
• Monitor Volatility: Keep an eye on market volatility and how it might impact your trades. The VIX, or the "fear index," is a common measure used by traders to assess market volatility and make informed decisions.

Remember, always do your research before selling, and ensure you understand the risks and potential rewards of your investment decisions.

How to short a stock

Short selling is when a trader borrows shares and sells them, hoping to buy them back at a lower price and make a profit. Here's how to short a stock in five steps:

• You'll need a margin account with at least $2,000. Borrowing shares from a broker is effectively a margin loan, and you'll pay interest on the outstanding debt.
• You'll need cash or stock equity in the margin account as collateral, equivalent to at least 50% of the short position's value.
• To maintain the short position, keep enough equity in the account to serve as collateral for the margin loan—at least 25% per exchange rules.
• You can maintain the short position for as long as you need. Just remember that you're paying interest on the borrowed shares.
• If the stock price falls, close the short position by buying the borrowed shares at the lower price and returning them. To make a profit, consider the interest, commission, and fees you'll pay.

Shorting can help traders profit from downturns in stocks and protect them from losses. However, it is risky, and some shorting maneuvers, like naked shorting, are illegal.

Frequently asked questions