Dear A.R.,

Many investors find order types, and especially Stop and Stop Limit orders, difficult to understand. I'll start with the definitions and then provide some specific examples to help clarify for you.

Stop Order

A Stop order is an order to buy or sell a security when its price surpasses a particular point, limiting your loss or locking your profit. Once the market price surpasses the predefined entry/exit point, the stop order becomes a market order, and is then handled as defined under the definition of a market order. This type of order is also referred to as a "stop-loss order". These types of orders may be placed with special instructions, like GTC (good until cancelled). Stops are not a definite guarantee of getting the desired entry/exit points. For instance, if a stock gaps down then your stop order will be triggered (or filled) at a price significantly lower than expected.

• Buy Stop Orders - The stop price is set above the current ASK price
• Sell Stop Orders - The stop price is set below the current BID price
• Depending on market conditions, once the order is triggered, there is no guarantee of the execution price and the price received may be several points away from the stop price.

As an example, we want to sell our position if the price of the stock drops to 30.25. Wait a minute! Lower than the prevailing market bid of 33.56? Yes! Because we won't actually trigger the stop order until GE trades lower to 30.25. Until that time we still own 10 shares of GE. A Stop Order is a protective order that limits our loss from the purchase price. Let's investigate.

After entering the symbol and the number of shares, select "Stop" from the Order Type drop down box. As soon as you select Stop, the Stop Price field will become accessible. It is important to note that for a sell order, the Stop price must be lower than the prevailing quote, which in this case a bid 33.82, so our Limit order of 30.25 is lower.

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Dear C.G.,

The best way to get started with Trade-Ideas is to go to the Settings button on the main tool bar. This will open to the Strategies tab. Here you will see two folders: Preconfigured Strategies and Recent Strategies.

The Preconfigured Strategies are a great way to learn how strategies can be set up. If you highlight any of the strategies here, you will see the Alerts/Filters for that strategy to the right in the icon view. When you mouse over the icon, you will see the details for that particular Alert/Filter. If you left click on the icon, you will be taken to the help page for a detailed definition of the Alert/Filter. Right clicking on the icon will take you to the window where you can alter that Alert/Filter.

Once you feel you are ready to create your own strategy, double-click on Start from Scratch under the preconfigured strategies. Next, you will go through each tab and select the Alerts/Filters you want to use, exchanges or symbol lists you wish to follow, and you will be given the opportunity to name your new strategy. Your new strategy will now be under the Recent Strategies folder for you to come back to and use the next time you log in. All you will need to do is open the settings menu, expand the Recent Strategies folder and double click on the strategy that you have created.

As always, feel free to contact your local branch office for additional information.

Sincerely,
Todd Slawson
Active Trader Specialist - Scottrade

Dear C.H.,

There are a variety of ways you can learn more about the specific functions within the ScottradeELITE trading platform. The three primary sources for help and information are: The Online User Guide, The Online Tutorial and Scottrade Webcasts. You can access all of them through the Help button at the top of your ScottradeELITE window. Below is a brief description of each one:

Online User Guide

The Online User Guide is written help that describes the functions within ScottradeELITE. To access the Online User Guide, click the Help button at the top of your ScottradeELITE window and select Online User Guide. You can use the table of contents on the left side of the window to select the topic you would like to learn more about. When possible, the Online User Guide provides graphics to help explain the features and functionality of ScottradeELITE.

Online Tutorial

The interactive tutorial uses sight and sound to teach you about ScottradeELITE. You can use the Menu function in the upper left-hand corner of the tutorial window to jump directly to a specific function, or watch the entire tutorial for a great overview of the entire platform.

Scottrade Webcast

Watch and learn! Watch video Webcasts on a variety of features within ScottradeELITE. Topics include: advanced charting, advanced order types, Trade-Ideas and ScottradeELITE overviews. We are continually releasing new Webcasts, so keep checking back for additional topics.

Of course, you can always call your local Scottrade Branch Office with any questions regarding ScottradeELITE.

We are always looking for feedback and suggestions of topics you would like to see covered. So, please feel free to send in your suggestions - we'd love to hear them!

Sincerely,

Kristin McDougall
Customer Education Manager at Scottrade

Scottrade's Stock Screener might be just what you're looking for. You can set up and save customizable screeners so that every time you're logged into your account, the screener is searching for stocks that meet your criteria. You can screen by market segment, price and performance, fundamentals, and earnings and dividends.

To access the stock screener, log into your account and click on the Quotes & Research tab at the top of the page. Next, click Stocks and then click Stock Screener on the left menu.

If you have any questions about how to set up your stock screener, feel free to contact your local Scottrade Branch Office.

Dear Trader,

Utilizing options as part of your overall investment portfolio will give you an important new tool to take advantage of certain market forecasts and situations. However, like any tool in a toolbox, the option isn't appropriate for all circumstances and has some limitations that are important to understand and be aware of.

First of all, lets begin by describing what an option is: An option is a contract that gives the buyer (holder) the right to obtain the underlying asset of the option, which could be a stock, equity, index or a variety of things, but for our purposes, let's keep it to a stock in a specific company, at a specific price at any time during the life of the option contract. Conversely, the seller (writer) of the option contract incurs the obligation to deliver that underlying asset at the specific price agreed upon whenever the buyer decides to exercise their right to do so.

There are two types of options available. One, the call option, provides the buyer with the right to buy the underlying stock at that specific price during the life of an option, and the other, called a put option, allows the buyer to sell the underlying stock at that specific price at any time during the life of the option contract. Here the seller of the call has the obligation to deliver the stock, while the seller of the put has the obligation to buy the underlying stock.

Once you understand these basic concepts of the rights and obligations of the two option types, puts and calls, you can begin to see the various possibilities in using them to take advantage of market and stock forecasts in your overall investment or trading program.

However, before we move on, it also important to understand a fundamental factor in working with options. That is, they are a wasting asset. The option contract you buy or sell to implement a market forecast will have a limited life. Unlike shares of stock, which in most cases, when added to your portfolio could be forever, so to speak, the option contract will expire at a set time in the future. This means that when you do look to utilize the option to implement a trade based on a forecast, you will have to consider not only the forecast - either up, down or neutral for the stock - but also a time horizon for that forecast to play itself out. This time factor is one of the most critical elements in options to be aware of and understand before making any trade. So this then is one of the differences between buying a stock versus buying the option on the stock.

Another element of difference is the concept of leverage when using options. Leverage can be defined as "the ability to control a large amount of something using a very small percentage of its value." Leverage, as it pertains to an option contract, allows you to control an amount of the underlying stock (usually 100 shares) for a small amount of what would be the cash purchase price for the 100 shares had you bought the stock. This amount is the premium or cost for buying that right to buy or sell the u

Dear Trader,

Orders in equity securities or options are immediately routed to market centers for execution. A market center is defined as an exchange, over-the-counter market maker, alternative trading system/ECN or other national securities association.

Limit orders are held on the market center's book to be displayed in accordance with order handling rules until they are filled. Stop orders are held by a market center until the stop price is triggered, and once that occurs, the order becomes a market or limit order. The exception are "Advanced Orders," such as trailing stop orders, which are held at Scottrade while they "trail" a stock's price. Once triggered, those orders are routed to a market center.

For more information on our order routing practices, visit our Order Routing & Execution page.

Sincerely,
Mitul Nakum

Mitul Nikum is Team Leader of Trading Services at Scottrade

Dear R.T.,

Phishing is a scheme that utilizes legitimate looking spam e-mail, pop-up messages and phony Web sites to deceive you into disclosing your personal information. "Phishers" gather personal information such as account numbers, passwords or even social security numbers to infiltrate your account or open new accounts using your identity.

One common way to identify a potential phishing scam is to check if the e-mail communicates a sense of urgency. For example, the phishing e-mail might warn, without prior notice, that your account will be closed or that your account information needs to be verified. This call-to-action is used to intimidate you into giving up your personal information.

Please remember that e-mail is NOT a secure method of transmitting information, and you should be extremely cautious about answering e-mail requests for your personal information. Scottrade will never ask you to disclose your account information or personal information in an unsolicited e-mail.

Below are some ways you can defend against phishing. You can also visit Scottrade's Security Center for additional information regarding online security and learn how to download a free one-year subscription to McAfee® VirusScan® Plus. The download also includes McAfee Site Advisor which tests and rates, on an ongoing basis, nearly every trafficked site on the Internet for a wide variety of Web safety issues such as phishing scams.

Ways to Defend Against Phishing

Because the threat environment is always changing, it is important to use current security software. Scottrade offers a complimentary one-year subscription to McAfee's VirusScan Plus and SiteAdvisor to help stop phishing, spam and other online threats.

• Do not supply personal information in an e-mail or pop-up.
  
  
• Beware of call-to-action e-mails such as, "Your account will be terminated if you do not update your information."
  
  
• Be careful when typing in Web site addresses, as some misspellings could send you to phishing sites.
  
  
• Use spam detectors to block malicious or fraudulent e-mails.
  
  
• Keep your operating system patched to avoid known software vulnerabilities. If you are running a Windows operating system, enable the automatic Windows updates or download these updates regularly.
  
  
• Download the latest version of your Internet Web browser to ensure that it is updated with the latest security technology.
  
  
• If you believe that a company is being misrepresented, contact that company using a trusted telephone number, e-mail address or Web site. If you believe that Scottrade has been misrepresented, please call 1-800-619-SAVE or e-mail us at support@scottrade.com

I hope this information helps. If you have any questions about security and your ScottradeELITE account,