How to Sell Stock in Schwab

Imagine waking up to find your stocks have hit an all-time high, but you don't know how to cash out. You want to take advantage of the peak but are uncertain about the selling process. This is a common scenario for many new investors. In this comprehensive guide, we will demystify the process of selling stock on Charles Schwab, one of the most popular online brokerage platforms.

Step 1: Log Into Your Schwab Account

The first step is to log into your Charles Schwab account using your username and password. If you haven't set up two-factor authentication, it's a good idea to do so for additional security. Once you're logged in, navigate to the 'Accounts' tab at the top of the dashboard.

Step 2: Select the Stock You Want to Sell

From the 'Accounts' tab, you will be able to view all of your holdings. Click on the specific stock you wish to sell. This will take you to a page with detailed information about your stock, including the current price, historical performance, and your current position.

Step 3: Choose the Action 'Sell'

After selecting your stock, look for the 'Trade' button on the right-hand side of the page. Click it and choose 'Sell' from the options. This will open up a trade window where you can enter the details of your sell order.

Step 4: Determine the Order Type

One of the most crucial aspects of selling your stock is choosing the right order type. There are several types of sell orders you can place:

• Market Order: This type of order sells your stock at the current market price. It's executed immediately but may not give you the best price if the market is volatile.
• Limit Order: You set a specific price at which you want to sell your stock. The order will only execute if the stock reaches your target price.
• Stop Order: This order becomes a market order once the stock hits a certain price.
• Stop-Limit Order: This is a hybrid order where you set both a stop price and a limit price. The order becomes a limit order once the stop price is hit.

For most new investors, a Limit Order is often recommended because it allows you to control the selling price.

Step 5: Enter the Quantity

After selecting your order type, you need to enter the number of shares you wish to sell. You can choose to sell all your shares or just a portion, depending on your investment strategy. Remember, you cannot sell more shares than you currently hold.

Step 6: Review Your Order

Before submitting your order, it's essential to review all the details to ensure accuracy. Check the stock symbol, order type, and quantity. Mistakes in this step can be costly, so double-check everything.

Step 7: Place Your Order

Once you're confident that everything is correct, click the 'Place Order' button. You will receive a confirmation that your order has been submitted. If you placed a Market Order, it will execute almost immediately. For Limit or Stop orders, your order will remain open until it reaches the specified price or expires.

Step 8: Monitor Your Order

After placing your order, you can monitor its status in the 'Orders' tab. This is especially important for Limit and Stop orders, as they may not execute immediately.

Common Mistakes to Avoid

1. Not Reviewing Your Order: Failing to double-check the order details can lead to selling the wrong number of shares or at an unintended price.
2. Using Market Orders During High Volatility: Market orders can execute at unfavorable prices if the stock is experiencing high volatility.
3. Ignoring Tax Implications: Selling stock has tax consequences. Be aware of your capital gains and how it may impact your tax return.

Frequently Asked Questions

1. What Fees Are Involved in Selling Stock on Schwab? Charles Schwab typically does not charge a commission for online equity trades, but there may be fees for broker-assisted trades or trades in certain types of investments.

2. How Long Does It Take to Get My Money After Selling Stock? After your stock is sold, it typically takes two business days (T+2) for the funds to settle in your account. You can then withdraw or reinvest the proceeds.

3. Can I Cancel My Order? You can cancel an order as long as it has not been executed. Go to the 'Orders' tab and click 'Cancel' next to the order you wish to stop.

4. What Happens If I Place a Limit Order and It Doesn't Execute? If your limit order does not reach the specified price, it will remain open until the order expires or is canceled. You can choose to modify or cancel the order at any time.

5. Is There a Minimum Amount of Stock I Need to Sell? There is no minimum amount of stock you need to sell, but you can only sell in whole share quantities. Fractional shares, if you own them, may require a different process.

Conclusion

Selling stock on Schwab is straightforward once you understand the process. The key is to take your time and double-check every step, especially when placing complex orders. Whether you're cashing out gains or rebalancing your portfolio, following these steps will help you make informed decisions.