What are the Different Types of Accounts?
This type of account asks you to deposit cash, and then you can use that cash to buy stocks, bonds, mutual funds, etc. It is not much more complicated than that.
The cash and securities in your account act as collateral for a line of credit that you take out from the brokerage in order to buy more stock. The interest rates that brokers charge, while below typical credit card rates, make the return that you need to earn on your investments much higher than if you're only investing with your own cash. We generally counsel against using margin.
This type of account allows you to trade options, which is a much riskier business than stocks. In general, we counsel against trading options
This is a different type of cash account, which has tax advantages when used to save for retirement. There are two types of IRA accounts, the traditional and the Roth. Just like with a cash account this type of account asks you to deposit cash, and then you can use that cash to buy stocks, bonds, mutual funds, etc.