Introduction to equity trading

Introduction to equity trading

Schwab Advisor Services™ provides you with an open architecture trading platform with various channels to submit trades. These channels include Schwab Advisor Center® Trading tab, Schwab Advisor StreetSmart Edge™, third-party order management software using FIX, or by phone.

  • Electronic trading tools allow you to streamline your workflow and execute trades efficiently. See Introduction to the Web Trading platform for more information specific to trading on Schwab’s proprietary website.
  • Certain orders, like orders for large blocks (10,000+ shares) or thinly traded securities, may benefit from special handling. Call your dedicated, regionalized Schwab Advisor Services Equity Trading Desk
  • For accounts where your firm maintains trading discretion, enter your trades electronically or call your Schwab Advisor Services Equity Trading Desk.
  • For accounts where your firm does not maintain trading discretion, have your client enter trades electronically or contact the Schwab Alliance service team directly at 800-515-2157.
  • For accounts where your firm maintains trading discretion, letters of authorization (LOAs) to place trades are not accepted. You may submit the trades electronically or by calling the Schwab Advisor Services Equity Trading Desk. 
Order typesWhen placing trades at Schwab, you can utilize certain order qualifiers and order types, including trailing order types, as part of a strategy to potentially protect a profit or limit a loss.

For access to not-held trading Tooltip and algorithm trading Tooltip , call your dedicated trading team.
Short salesA short sale occurs when an investor sells shares of a security they don't own by first borrowing them from Schwab or a third-party lender. The short seller's account is credited with the value of the shares at the time of the sale. Short sellers anticipate the price of those shares will decline and the shares can be purchased, or covered, at a lower price. Once shorted shares are covered, the position is closed.

For additional information see the Important considerations regarding short sales.
Block tradesWhen trading in the same security for more than one client, we suggest you take advantage of Schwab's block trading capability. Block trading has several potential benefits for your clients. With a block trade, you can buy and sell shares in an aggregate transaction at the master account or firm level and allocate the shares among your clients at an average price. Commissions are assessed at the individual account level, rather than in the block account.

Schwab requires you submit all client account allocations by 5:00 p.m. ET on trade date. Failure to comply with this policy may result in suspension of your block trading privileges. Additionally, Schwab may take market action at any time to cover unallocated orders plus broker-assisted commission charges.
Restricted stockFor detailed information about restricted stock, see How to trade restricted and control securities. Call the Schwab Restricted Stock Team at 877-804-3525 if you have questions about transactions in affiliate or restricted stock positions.
Foreign equitiesSchwab's foreign trading offer gives you access to more than 40 foreign markets, a robust lineup of investment vehicles, and in-depth research. All trades settle and display in U.S. dollars.
Settlement terms
  • Equities—Two business days after trade date
  • Options—One business day after trade date
CancellationsExercise caution when placing equity orders. Once you have placed a market or limit order, it may not be possible to cancel or change it.
Vendor/Exchange CodesRegulation 603(c) requires vendor/exchange codes displayed when showing the Next Best Bid/Offer (NBBO) quote data on trading platforms.
Borrowing RateThe borrow rate is quoted as an annualized interest rate, which updates daily to reflect changing supply and demand in the securities lending market. This borrow rate determines the fee charged to maintain a short position, assessed only when a security is classified as hard-to-borrow. See the Pricing Guide to learn how fees are assessed.

Descriptor terms indicating relative availability of a given stock in the securities lending market:

  • Available: Shares readily available to short at no charge.
  • Limited: Shares may be in short supply, but short sale orders may be accepted.
  • Not Available: Shares not available to borrow; short sale orders are not accepted.
  • Not Shortable: Security not eligible to be shorted.
 Standard market tradingExtended-hours trading
Trading hoursOrders executed from 9:30 a.m. to 4:00 p.m. ET entered at any time.
  • Pre-market orders: May be placed as early as 8:05 p.m. ET (previous trading day) and order execution takes place between 7:00 a.m. and 9:25 a.m. ET.
  • After-market orders: May be placed as early as 4:05 p.m. ET, and order execution takes place between 4:05 p.m. and 8:00 p.m. ET.
VenueTrading primarily occurs on exchanges (NYSE, Euronext, and other regional markets) and on Nasdaq through a variety of venues, including market makers, specialists, and electronic markets Tooltip .Schwab displays and executes extended hours orders through an outside vendor. This executing venue may have relationships with other Electronic Markets participating in an extended hours trading network in order to provide access to orders or prices available on these other participating Electronic Markets.
Order typesAll order types are accepted.Only limit orders are accepted. Qualifiers such as AON, minimum quantity, are not accepted.
Trade sizesAll order sizes are accepted.All trade sizes (round, mixed, and odd lots). Maximum order size is 25,000 shares and maximum notional value is $4 million. The value is determined by multiplying the number of shares by the previous day’s closing price.
Security typesAny security types offered on the open exchanges are available, including stocks, options, bonds, mutual funds, Treasuries, etc.Most Nasdaq and listed securities are available for trading.
Time limitsDifferent time limits and order qualifiers are available. Unexecuted limit orders placed during the standard session do not carry over to the extended-hours trading session.All orders are only good for the particular session in which they are placed. Unexecuted orders are canceled and do not carry over into any following session.
Trading activityHigher trading activity generally means more liquidity and a greater likelihood of order execution.Lower trading activity may result in lower likelihood of order execution, plus wider spreads and greater price fluctuation.
QuotesConsolidated and represent the best available prices across all trading venues.

Market makers and specialists work to ensure clients get the best buy or sell prices displayed on Nasdaq and the exchanges.
Not consolidated and represent the current prices available through the electronic market.

As a participant in the extended-hours trading network, the electronic market may also offer access to prices available on other participating electronic markets, but not necessarily all venues open for extended-hours trading.

When will my extended-hours trade settle?
Like orders placed during standard market hours, extended-hours trades will settle on the second business day from the execution date of the order.

Can I make a change to an extended-hours order?
You can attempt to change or cancel an extended-hours order within the same extended-hours session, as long as your order has not already executed. You cannot change your extended-hours order to a standard market hours order.

How can I cancel or correct equity trades after they execute?
If market action is required, please contact the ACT Trade Error Team at 800-367-5198 option 6. If no market action is required and you're simply correcting a trade, complete and submit the Cancel Rebill Request form to your Schwab service team. If an account holder's signature is required, also submit the Addendum to Cancel Rebill Request form.

Schwab will make every effort to correct the trades as intended in a timely fashion, acknowledging the submission of this form is not an agreement by Schwab that a trade adjustment will be made.

The following are available to assist you:

How to trade equities, mutual funds, and options through the Web Trading platform
How to trade fixed income securities
How to trade restricted and control securities
Introduction to fixed income trading
Introduction to general trading
Introduction to mutual fund trading
Introduction to order routing and execution
Introduction to Schwab Alliance
Introduction to the Web Trading platform

See the Charles Schwab Pricing Guide for fees, commission, and pricing information.

Refer to the Schwab Order Execution Advantage™and Schwab’s Trade Error Policy documents for more information on trade execution and remediation at Schwab.

For expert advice on using ETFs effectively, register for the webcast, Best Practices for trading ETFs.

To learn more about equity trading, contact your dedicated Schwab Advisor Services Equity Trading Desk. For assistance or general information, send an email or a Schwab Advisor Center service request to