Have you been holding onto some stocks in your ETRADE account and now you're wondering, how do I finally cash in on those investments? Don't worry, you're in the right place! Selling stocks on ETRADE is a straightforward process, and with this comprehensive guide, you'll be executing your trades like a pro in no time.
Whether you're looking to lock in profits, cut your losses, or rebalance your portfolio, understanding the step-by-step process is crucial. Let's dive in!
A Step-by-Step Guide to Selling Stock on E*TRADE
Selling stock isn't just about hitting a "sell" button; it involves understanding your options, market conditions, and potential implications. Here’s how to navigate the process on E*TRADE.
Step 1: Log In and Access Your Account
The very first and most critical step is to securely log into your E*TRADE account.
Access the Platform: Open your web browser and go to the official ETRADE website (etrade.com) or launch the ETRADE mobile app on your smartphone or tablet.
Enter Your Credentials: You'll be prompted to enter your User ID and Password. Always ensure you are on the legitimate E*TRADE website to avoid phishing scams.
Two-Factor Authentication (2FA): If you have 2FA enabled (and you absolutely should for enhanced security!), you'll likely receive a verification code on your registered mobile device or email. Enter this code to complete the login process. This extra layer of security protects your assets from unauthorized access.
Once you're logged in, you'll land on your E*TRADE dashboard, where you can see an overview of your portfolio.
Step 2: Locate the Stock You Wish to Sell
Now that you're in, it's time to find the specific stock you want to sell.
Navigate to Your Portfolio: Look for a section usually labeled "My Accounts," "Portfolios," or similar. This is where all your holdings are listed.
Identify the Stock: Scroll through your list of investments until you find the ticker symbol or company name of the stock you intend to sell.
Click to Initiate Trade: Typically, there will be an option next to each holding to "Trade," "Sell," or "Place Order." Click on the relevant button for the chosen stock. Alternatively, you can use the search bar at the top of the platform and type in the stock's ticker symbol directly, then select the "Sell" option.
Step 3: Enter Your Sell Order Details
This is where you specify the parameters of your sale. This section requires careful attention to detail.
3.1: Select "Sell" Action
After selecting the stock, confirm that the action selected is "Sell." E*TRADE's trading interface will usually default to "Buy" if you're searching for a new stock, so double-check this setting.
3.2: Specify Quantity
Number of Shares: Enter the exact number of shares you wish to sell. You can choose to sell all your shares or just a portion of them. Be precise to avoid any accidental over-selling.
3.3: Choose Your Order Type
This is a crucial decision that impacts how your trade will be executed. E*TRADE offers several order types, each suited for different market conditions and trading strategies.
Market Order:
Description: A market order is an instruction to buy or sell a security immediately at the best available current market price.
Pros: It guarantees execution, meaning your order will almost certainly be filled.
Cons: It does not guarantee a specific price. In volatile markets, the price you receive might be slightly different from the last quoted price you saw. This is generally suitable for highly liquid stocks where price fluctuations are minimal over short periods.
Limit Order:
Description: A limit order allows you to set a specific price at which you are willing to sell your stock, or better. A sell limit order will only execute at your specified limit price or higher.
Pros: Provides price control. You won't sell for less than your desired price.
Cons: No guarantee of execution. If the market price doesn't reach your specified limit, your order may not be filled, or only partially filled. This is ideal when you have a target price in mind and are not in a rush to sell.
Stop Order (Stop-Loss Order):
Description: A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price, known as the "stop price." When the stop price is reached, the stop order becomes a market order.
Pros: Helps limit potential losses on an existing position. It acts as a safety net.
Cons: Once triggered, it becomes a market order, so the execution price is not guaranteed and could be lower than your stop price, especially in fast-moving markets (this is known as "slippage").
Trailing Stop Order:
Description: A trailing stop order is a more dynamic version of a stop order. For a sell order, it's set at a specific dollar amount or percentage below the current market price and trails the price upwards as it moves. If the price falls by that specified amount from its peak, the order triggers a market order to sell.
Pros: Allows you to protect profits while giving the stock room to run higher. It automatically adjusts, so you don't have to constantly monitor the price.
Cons: Similar to a regular stop order, once triggered, it becomes a market order, so slippage can occur. It also carries risks during significant market gaps or volatility.
3.4: Set Order Duration (Time in Force)
This dictates how long your order will remain active if it's not immediately filled (applicable for Limit, Stop, and Trailing Stop orders).
Day Order: Your order is active only for the current trading day and expires at the close of the market if not filled.
Good 'Til Canceled (GTC): Your order remains active until it's executed or you manually cancel it. E*TRADE typically has a maximum duration for GTC orders (e.g., 60 days), after which it will expire if not filled.
Other Options: E*TRADE may offer other less common options like "Fill or Kill" (FOK) or "Immediate or Cancel" (IOC) which are typically used by more active traders.
Step 4: Review and Confirm Your Order
Before submitting, always review your order carefully. This is your last chance to catch any errors.
Order Summary: E*TRADE will present a summary of your order, including:
Action: Sell
Symbol: The ticker of the stock
Quantity: Number of shares
Order Type: Market, Limit, Stop, Trailing Stop
Price (if applicable): Your specified limit or stop price
Time in Force: Day, GTC, etc.
Estimated Commission/Fees: While E*TRADE generally offers $0 commissions for online stock trades, there might be regulatory fees or fees for OTC stocks or broker-assisted trades. Pay close attention to any listed fees.
Potential Impact: Consider the current market price versus your chosen order price. Are you comfortable with the potential execution price?
Click "Preview Order" or "Review Order": This will take you to a final confirmation screen.
Submit Order: If everything looks correct and you're confident in your decision, click the "Place Order" or "Submit" button.
Step 5: Monitor Your Order and Confirmation
Once your order is submitted, the process isn't entirely over.
Order Status: You can typically track the status of your order in a "Order Status" or "Trade History" section of your E*TRADE account. It will show as "Pending," "Partially Filled," "Filled," or "Canceled."
Trade Confirmation: Once your order is fully executed, you will receive a trade confirmation. This document will detail the exact price at which your shares were sold, the total proceeds, and any fees incurred. Keep this for your records, especially for tax purposes.
Settlement: Stock trades generally "settle" on a T+1 basis, meaning the transaction is finalized one business day after the trade date. The proceeds from your sale will typically be available in your E*TRADE account for withdrawal or reinvestment after this settlement period.
Important Considerations When Selling Stock on E*TRADE
Tax Implications: Selling stocks can trigger capital gains or losses. It's crucial to understand the tax implications. Short-term capital gains (assets held for one year or less) are typically taxed at your ordinary income tax rate, while long-term capital gains (assets held for more than one year) usually have a lower tax rate. Consult a tax professional for personalized advice.
Market Volatility: Be aware of market conditions. In highly volatile markets, the price you see might not be the exact price you get, especially with market orders.
Liquidity: For less frequently traded stocks (low liquidity), it might be harder to execute a large sell order at your desired price. Limit orders are often preferred in such cases.
Trading Hours: The standard U.S. stock market hours are 9:30 AM to 4:00 PM Eastern Time, Monday through Friday. E*TRADE also offers extended-hours trading (pre-market and after-hours), but liquidity can be significantly lower during these times, leading to wider bid-ask spreads and potentially less favorable execution prices. Limit orders are generally required for extended-hours trading.
Reinvestment Strategy: If you're selling to free up cash for other investments, have a clear plan for how you intend to reallocate those funds.
10 Related FAQ Questions:
How to Check the Current Price of a Stock on E*TRADE?
You can check the current price of a stock by typing its ticker symbol into the search bar on the E*TRADE platform or by navigating to your portfolio and selecting the specific stock to view its detailed quote page.
How to Find My Trade History on E*TRADE?
Your trade history can typically be found under the "Accounts" or "Activity" section of your E*TRADE account, often labeled as "Order History," "Trade Confirmations," or "Transaction History."
How to Cancel a Pending Sell Order on E*TRADE?
To cancel a pending sell order, go to your "Order Status" or "Open Orders" section within your E*TRADE account, locate the specific order, and click the "Cancel" button next to it. Be aware that orders may not be cancellable if they have already been partially or fully executed.
How to Understand the Fees for Selling Stocks on E*TRADE?
E*TRADE generally offers $0 commission for online trades of U.S.-listed stocks and ETFs. However, there may be regulatory fees (like SEC fees or FINRA TAF), fees for OTC (Over-the-Counter) stocks, or higher fees if you place a trade through a live broker. Always review the "Estimated Commission/Fees" before confirming your order.
How to Withdraw Funds After Selling Stock on E*TRADE?
Once your stock sale has settled (typically T+1, one business day after the trade), the proceeds will be available in your E*TRADE account. You can then initiate a withdrawal via ACH transfer to a linked bank account, wire transfer, or by requesting a check.
How to Sell Fractional Shares on E*TRADE?
ETRADE supports fractional share trading, primarily through dividend reinvestment plans (DRIPs) and their robo-advisor services. If you hold fractional shares from a DRIP, you can typically sell them along with whole shares. However, direct purchase of fractional shares for active trading might have limitations; always check ETRADE's specific policies for fractional share liquidation.
How to Deal with Good-Faith Violations on E*TRADE?
A good-faith violation occurs when you buy and sell a security using unsettled funds within a cash account. To avoid this, ensure you wait for the funds from a previous sale to settle before using them for a new purchase and then selling that new purchase before its own settlement. E*TRADE will provide warnings if you are at risk of such a violation.
How to Set Up a Trailing Stop Sell Order on E*TRADE?
To set up a trailing stop sell order, select "Sell" for your desired stock, then choose "Trailing Stop" as the order type. You will then input the trailing amount (e.g., $1.00 or 5%) by which the price can drop from its highest point before triggering a market order to sell.
How to Handle Tax Documents for Stock Sales on E*TRADE?
ETRADE provides consolidated tax forms, such as Form 1099-B, which reports proceeds from broker and barter exchange transactions, including stock sales. These documents are usually available in the tax center section of your ETRADE account early in the new year, which you can use when filing your income taxes.
How to Reinvest Proceeds from a Stock Sale on E*TRADE?
After your stock sale settles and the cash is in your E*TRADE account, you can use these funds to purchase other stocks, ETFs, mutual funds, or any other investment product available on the platform. Simply initiate a new "Buy" order for your desired security using the available cash balance.