How to Sell a Stock on TD Ameritrade: A Pro’s Guide

Selling a stock on TD Ameritrade is a straightforward process, designed to be user-friendly for both novice and experienced investors. Simply log into your TD Ameritrade account, navigate to the “Trade” tab, select “Stocks & ETFs,” enter the ticker symbol of the stock you wish to sell, choose “Sell” as your action, specify the number of shares and order type (e.g., market, limit), review your order details carefully, and then click “Place Order”.

Understanding the Nuances of Selling Stock on TD Ameritrade

Selling a stock might seem simple, but beneath the surface lies a landscape of strategic considerations. It’s more than just clicking a button; it’s about understanding your investment goals, risk tolerance, and the market conditions that might impact your trade execution. Let’s delve deeper into the mechanics and strategies for selling stock on TD Ameritrade.

Step-by-Step Guide to Selling Your Stock

1. Login to Your Account: First, access your TD Ameritrade account through the website or the mobile app. Ensure you have your login credentials handy.

2. Navigate to the Trade Platform: Once logged in, find the “Trade” tab. It’s typically prominently displayed in the main navigation menu. Click on it to access the trading interface.

3. Select “Stocks & ETFs”: Under the “Trade” menu, you’ll usually see options for various asset classes. Select “Stocks & ETFs.” This will open the trading ticket specifically designed for buying and selling stocks.

4. Enter the Ticker Symbol: In the trading ticket, you’ll find a field labeled “Symbol” or “Ticker.” Enter the ticker symbol of the stock you want to sell. For example, if you’re selling Apple stock, you would enter “AAPL.”

5. Choose “Sell” as the Action: Next, you’ll see a dropdown menu or set of radio buttons allowing you to choose the action you want to perform. Select “Sell.” This indicates that you’re looking to dispose of your shares.

6. Specify the Quantity: Enter the number of shares you wish to sell. Be careful to double-check this number, as an incorrect quantity could lead to unintended consequences.

7. Select Order Type: This is where your strategy comes into play. Choose the order type that best suits your needs. Common options include:

   • Market Order: Executes your order at the best available price immediately. This is the simplest option but doesn’t guarantee a specific price.
   • Limit Order: Allows you to specify the minimum price you’re willing to accept for your shares. The order will only execute if the market price reaches or exceeds your limit price. This provides more control but doesn’t guarantee execution.
   • Stop Order: Becomes a market order once the stock price reaches a specified stop price. This is often used to limit potential losses.
   • Stop-Limit Order: Similar to a stop order, but instead of becoming a market order, it becomes a limit order once the stop price is reached. This gives you more control but increases the risk of non-execution.

8. Specify Order Duration: Decide how long your order should remain active. Common options include:

   • Day Order: The order is only valid for the current trading day. If it’s not filled by the end of the day, it’s automatically canceled.
   • Good ‘Til Canceled (GTC): The order remains active until it’s either filled or you manually cancel it.

9. Review Order Details: Before submitting your order, carefully review all the details, including the ticker symbol, action (sell), quantity, order type, and duration. Double-check everything to ensure accuracy.

10. Place Order: Once you’re satisfied with the details, click the “Place Order” button. TD Ameritrade will likely present a confirmation screen before submitting the order to the market.

11. Monitor Order Status: After placing your order, you can monitor its status in the “Order Status” section of your account. This will show whether the order has been filled, is pending, or has been canceled.

Advanced Strategies for Selling Stock

Beyond the basic steps, consider these advanced strategies:

• Tax-Loss Harvesting: Selling stocks at a loss to offset capital gains and reduce your tax liability.
• Trailing Stop Orders: Dynamically adjust your stop price as the stock price rises, allowing you to lock in profits while protecting against potential downturns.
• Selling Covered Calls: If you own the stock, you can sell call options to generate income.
• Dollar-Cost Averaging Out: Selling a fixed dollar amount of stock over time to reduce the impact of market volatility.

Understanding these strategies can help you optimize your selling decisions and achieve your financial goals.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions about selling stocks on TD Ameritrade:

1. What fees are associated with selling stock on TD Ameritrade?

TD Ameritrade does not charge commissions for online stock trades. However, regulatory fees, which are very small, may apply. Always review the fee schedule on the TD Ameritrade website for the most up-to-date information.

2. What is a “wash sale” and how can I avoid it?

A wash sale occurs when you sell a stock at a loss and then repurchase the same or a substantially similar stock within 30 days before or after the sale. The IRS disallows the loss in this case. To avoid a wash sale, wait at least 31 days before repurchasing the stock or invest in a different, though similar, stock.

3. How long does it take for the funds from a stock sale to be available in my account?

Typically, it takes two business days (T+2) for the funds from a stock sale to settle and become available for withdrawal or reinvestment.

4. Can I sell stock short on TD Ameritrade?

Yes, TD Ameritrade allows short selling, but you’ll need to have a margin account and meet specific requirements. Short selling involves borrowing shares and selling them, hoping to buy them back at a lower price later. It’s a risky strategy.

5. What is the difference between a market order and a limit order when selling stock?

A market order sells your shares at the best available price immediately, while a limit order allows you to specify the minimum price you’re willing to accept. Market orders guarantee execution but not price, while limit orders guarantee price but not execution.

6. How do I cancel an order on TD Ameritrade?

To cancel an order, go to the “Order Status” section of your account, find the pending order you want to cancel, and click the “Cancel” button. Keep in mind that you can only cancel orders that haven’t been filled yet.

7. Can I sell fractional shares on TD Ameritrade?

Yes, TD Ameritrade supports fractional shares, allowing you to sell portions of a share if you don’t own a full share.

8. What are the tax implications of selling stock?

Selling stock can result in capital gains or capital losses. If you hold the stock for more than a year, it’s considered a long-term capital gain, which is taxed at a lower rate than short-term capital gains (held for a year or less). Consult with a tax professional for personalized advice.

9. What is the minimum balance required to sell stock on TD Ameritrade?

There is typically no minimum balance required to sell stock on TD Ameritrade, as long as you have the shares available in your account.

10. How do I sell stock from an IRA or other retirement account on TD Ameritrade?

The process is the same as selling stock from a taxable account, but withdrawals from retirement accounts may be subject to taxes and penalties, depending on the type of account and your age.

11. What happens if my sell order doesn’t execute?

If your sell order doesn’t execute, it could be due to several reasons, such as the price not reaching your limit price or insufficient trading volume. You can adjust your order parameters or cancel the order and try again.

12. How do I transfer stock from another brokerage to TD Ameritrade before selling?

You can initiate an Account Transfer through the TD Ameritrade website. This typically involves filling out a form and providing information about your account at the other brokerage. TD Ameritrade will handle the transfer process.

Selling stocks on TD Ameritrade is a vital part of managing your investments. By understanding the process, order types, and potential strategies, you can make informed decisions and achieve your financial objectives. Remember to consult with a financial advisor for personalized investment advice.