Stock watch list for tomorrow, February 23, 2010.

AT&T (T: 25.56 0.00%) – This is a huge dividend paying stock that is trading at only $25. This has the potential to go up to $28 by the end of next month.

Bank of America. (BAC: 16.80 0.00%) – I had previously advised to buy this stock when it was trading under $14.50, Look where it is now and it does not seem like it will be stopping anytime soon.

Stock Watch List for tomorrow February 5, 2010:

AT&T (T: 25.56 0.00%) – It is only trading at $25.05.

CSX Corp. (CSX: 49.52 0.00%) – This stock will eventually bounce back.

There is a buzz in the market today after Google’s rare threat of defiance in China.

Google’s shares have dropped (GOOG: 560.19 0.00%), but the shares of Baidu (BIDU: 539.10 0.00%) have jumped more than 10% on the news.

“Google’s threat to pull out of China over censorship is a rare display of defiance in a system where foreign companies have long accepted intrusive controls to gain access to a huge and growing market.”

Source

But, analysts don’t believe Google will leave China. China is a huge market and growing market. Pulling out of her right now will cost Google in the long-term.

Leaving China would cost Google long term

Any decision by Google Inc. (GOOG: 560.19 0.00%) to get out of China would cost the Internet search giant in the long run, though it would, of course, be praised on the ethics front. Google threatened yesterday to pull out of China, citing a “highly sophisticated” cyber attack on its e-mail service it believed was aimed at human rights activists. Google also said it would begin defining censorship restrictions.

A move by Google to actually cease operations in China, where it is not the leader among search engines, would give local competitors, and companies such as Microsoft Corp. (MSFT: 28.80 0.00%) a leg up just as the Chinese market is surging. But some analysts think Google’s announcement yesterday was really aimed at setting the stage for talks with the government. “We believe Google will probably stay as China is a vital market,” one analyst said in a research note, according to Reuters. “Any China Internet veteran understands the need to work within the system and the Chinese preference for gradual change.”

Source

Zecco:

Price per trade:
$4.50 – Internet based
$19.95 – Broker Assisted

10 free stock trades if you do 25 of more trades per month or if you have $25,000 in your account.
Options: $4.50 + 0.5 per contract

Margin Rates:

$0-$9,999 - 7.75%
$10,000-$24,999 – 7.50%
$25,000-$49,999 – 7.25%
$50,000-$99,999 – 6.75%
$100,000-$249,999 – 6.25%
$250,000-$499,999 – 4.50%
$500,000 + – 4.00% – Call them, it is negotiable.

TradeKing:

Price per trade:
$4.95 (Both internet and broker assisted)

TRADEKING adds $0.01 per share on the entire order for stocks priced less than $1.00. $100 minimum investment per order in OTCBB and Pink Sheet stocks.

Margin Rates:
$0 – $9,999 – 6.50%
$10,000 – $24,999 - 6.50%
$25,000 – $49,999 - 6.50%
$50,000 – $99,999 - 5.50%
$100,000 – $249,999 - 5.50%
$250,000 – $499,999 - 4.50%
$500,000 – $999,999 - 4.50%
$1,000,000 + - 4.50%

In conclusion: If you interact with the customer service, prefer broker assisted trading and prefer a margin account then TradeKing is better.
If you trade penny stocks, want to get 10 free trades and pay cheap commissions then Zecco is better.

When people buy stocks, they want the stock price to go up. This is called a “Long” position.

If you want the stock price to go down, you are taking a “Short” position.

So, when you are “shorting stocks”, you borrow stocks from your brokerage company, sell them at the current market price, and get the proceeds. Since you borrowed that stock, you have to give it back. If the price of that stock falls, you can buy that stock back at a cheaper price and give it to your brokerage firm.

Let me give you an example:

Couple of months ago, the shares of Citi Group (C) were selling for $5.00. Say, you got a feeling then that the stock price of C will go down and you shorted 1000 shares of C. You proceeds would have been $5000. Remember that you borrowed these shares and you have to buy them back from the market. Now, as of today, the stock price of C is $3.40. To buy 1000 shares, you have to pay $3400. Your total profit is $5000-$3400 = $1600.

Sir, you have just made some profit.

BUT…there is always a “BUT”. If the stock price had gone up, you would have lost money.

Facts about “Shorting Stocks”.

1. When you open a position, it is called “Short” position. When you close this position, it means to “cover” your position.

2. When you open an online trading account, you are generally not allowed to short stocks. You have to have a “Margin account” and the permission of your broker to short stocks.

3. Shorting stocks can be very risky because your potential loss is unlimited. When you short stocks, you are hoping the price will go down. What if the price goes up and goes up very high. Theoretically, it can go to infinity and beyond. To cover your short position, you may have to spend all your wealth.

I have a margin account at Zecco.com(aff.) and I can short stocks, if I want. It is just a useful tool to have, because you can make money if the stock market goes red.