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Online Stock Trading

Getting started in online stock trading is not that difficult at all. All you have to do is choose an online broker, open the required settlement/beneficiary bank account for your trading activities, apply for an online trading account, put funds in your trading bank account, and then your set to go for your first online stock trading transaction.

Stocks and securities

Stocks are shares of ownership in a corporation. When you become a stockholder or shareholder of a company, you become part-owner of that company.

Securities, on the other hand, are proof of one's ownership or indebtedness in a company. Examples of securities are treasury bills and commercial papers, which are considered as short-term and are traded in the money market; and stocks and bonds, which are long-term and traded in the capital market. Securities are easily bought and sold in the stock market.

Buying or selling shares of stocks

In the Philippines, the only operating stock exchange is the Philippine Stock Exchange (PSE). Its main function is to facilitate the buying and selling of stocks and other securities through its accredited trading participants. The PSE has two trading floors - PSE Centre in Ortigas, Pasig City and PSE Plaza in Ayala, Makati City - where trading participants trade daily - from 9:30 a.m. to 12:10 p.m. except Saturdays, Sundays, legal holidays and days when the Central Bank Clearing Office is closed.

Unit of trading

Trading of shares shall be in terms of fixed minimum amounts called board lots. Depending on the price range of a particular stock, the unit of trading ranges from 10 to 1,000,000 shares. Cost of transaction therefore varies from company to company since prices of each company differ according to its par value.

Choose a stockbroker

The first step, according to the PSE investing procedures, is to choose your stockbroker.


In my case, I have chosen BPI Securities Corporation and used their BPITrade services for my online stock trading.


A broker is person who acts as intermediary between a buyer and seller, usually charging a commission; they must be registered with the exchange where the securities are traded.



The PSE has a complete list and information about all its trading participants who are authorized and qualified to trade either equity or debt securities for you. This list is also available on the Exchange's website and the PLDT directory's Government and Business listings yellow pages under the category of stock and bond brokers.

Trading Participants may also be called "Members of the Philippine Stock Exchange, Inc.".


BPI Securities Corporation

This is a wholly-owned subsidiary of the Bank of the Philippine Islands. In July 2000, the company launched "bpitrade.com", an on-line stock trading facility via internet or through wireless access protocol (WAP). "bpitrade.com" enables clients to view live stock market information, online buying and selling of stocks, access to research reports.

For stock transactions, BPITrade charges a commission of 0.25% on the gross value of each trade, or a minimum commission of PhP 20.00.


Open Settlement/Beneficiary Account

You will be required to nominate a Settlement/Beneficiary Account which shall receive the withdrawals you shall be making from your stock trading bank account. You must also be one of the account holders of the nominated Settlement/Beneficiary Account.


Thus after choosing BPI Securities as your online stockbroker and before you apply for a BPITrade Account, your next step will have to be to open first a savings or checking account with your nearest BPI branch or BPI Family Savings Bank branch. Use the branch locator to find out your nearest branch.


"Settlement Account" means for Cash Client, the bank account with BPI/BPI Family Bank/BPI Direct designated by you, into which amounts you will withdraw from your BPITrade Bank Account will be credited.


Open a BPITrade account

Now, after you have opened a savings or checking account with BPI or BPI Family Savings bank, you are ready to open you BPITrade account. Here's what you need to do next:

Go to the BPITrade homepage:

Simply click “Apply Now,” then click “Apply Online”:


Choose the appropriate Online Application Form.

Fill up the Online Application Form:

Then print, sign, and bring the forms to your nearest BPI branch, BPI Family Savings Bank branch, or BPI Express Remittance Center for signature verification. .


Minimum investment required to open an online stock trading account

There is no minimum investment required to open a BPITrade account. However, before you can purchase shares of stock, fixed income securities, or mutual funds, you must first deposit funds into your BPITrade Bank Account. The BPITrade bank account (“Settlement Account” maintained with BPI Direct Savings Bank) requires an Average Daily Balance of only PhP 5,000.00.

Monthly fees

There are no monthly maintenance fees on your BPITrade Securities Account. However, your BPITrade Bank Account will require a monthly average daily balance of PhP5,000.00. The average daily balance is computed as follows:

ADB = (Day 1 ending balance + Day 2 ending balance +...+ last day of month ending balance) / No. of days in the month (i.e. 28/30/31 days)

BPITrade Bank Account

For trading purposes, BPITrade shall open a new BPITrade Bank Account in your name. All credits and debits as a result of your trading activities shall be made against your BPITrade Bank Account.

"BPITrade Bank Account" means the bank account with BPI Direct Savings Bank which a Cash Client is required to open and maintain, in connection with his securities transactions.

"Cash Client" means a new client of BPI Securities Corporation/BPI Capital Corporation. More specifically, a Cash Client is a new client of BPI Sec/BPI Cap who apply for the BPITrade online trading facility. The Cash Client is allowed to purchase either Equities or Fixed Income Securities up to the Available Cash balance in his BPITrade Bank Account.

All incoming cash into a Cash Client’s account (e.g. sale proceeds, cash dividends, maturities, etc.) are credited to his BPITrade Bank Account.

You will need to make an initial deposit to your Settlement Account to open a BPITrade account. These funds are to be used in purchasing stocks, fixed income instruments, or mutual funds, and do not represent a balance requirement. You may also contribute your existing stock portfolio as your initial securities in your BPITrade account.

Making a deposit into your BPITrade Bank Account

Once your account application has been approved, you will recieve via e-mail your BPITrade Bank Account Number. There are four (4) ways to fund your BPITrade Bank Account.

> Through the Branch : Go to any BPI Branch and make an Over-the-Counter deposit straight to your BPITrade Bank Account.

> Through Expressphone or the ATM : You can transfer funds into your BPITrade Bank Account from your BPI Account or BPI Family Savings Bank Account through these facilities. Enroll your BPITrade Bank Account by calling 89-100 or visiting your branch of account.

> Through www.bpiexpressonline.com : Enroll your BPITrade Bank Account in BPI Express Online and transfer funds from your other BPI, BPI Family Savings Bank or BPI Direct accounts. Click on “My Portfolio” and Enroll your BPITrade Bank Account as an Additional Savings Account. If you are not yet a BPI Express Online client, please go to the website and enroll now.

> Through Telegraphic Transfer from your bank, or through any overseas BPI Express Remittance Center (BPI SWIFT Address for Telegraphic Transfers: BOPIPHMM) .

Note that deposits made to your BPITrade bank account shall be reflected in your Cash Position in BPITrade the NEXT trading day.

BPI Savings Account

If you opened a BPI Expressteller Savings Account as your Settlement/Beneficiary Account, maintain an average to daily balance (ADB) of Php3,000.00 to avoid service charge.

Even better, maintain an ADB of Php5,000.00 and your deposit will earn interest.

References:

http://www.pse.org.ph/
http://www.bpitrade.com/
http://www.bpiexpressonline.com/