There are several answers to the question on How To Buy Stock Online. But, the easiest method of buying stocks is through an online stockbroker. After registering and funding your account, you can purchase the stocks through the broker’s website within minutes with your bank card.

How To Buy Stock Online
How To Buy Stock Online

Though, there are other options which include using a full-service stockbroker, or buying stock directly from a company. Read more on this article to learn the basics on how to buy stock online for free.

Terms And Definitions

  • Ask – This is for buyers. It is the price that sellers are willing to accept for a stock.
  • Bid – This is for sellers. It is the price that buyers are willing to pay for a stock.
  • Spread – It is the difference between the highest bid price and lowest ask price.
  • Market order – This is a request to buy or sell a stock immediately at the available best price.
  • Limit order – Refers to a request to buy or sell a stock only at the specific price or better.
  • Stop (or stop-loss) order – When a stock reaches a set price, the “stop price” or “stop level,” is a market order that is executed and the entire order is filled at the prevailing price.
  • Stop-limit order – As the stop price is reached, the trade then turns into a limit order and is filled up to a point where specified price limits can be met.

How To Buy Stock Online

Before you can get to buy stocks, you will need a brokerage account. This can be easily set up within few minutes. After you have added money to the brokerage account, then you can follow the steps below to find, select and invest in individual companies.

Pick And Register An Online Stock Broker

Before buying stock, it is wise to consider first an online stockbroker. After you have created the online stock broker account, you are required to fund it. Then you can purchase the stocks on the account.

Creating an online brokerage account is just like setting a bank account. All required is to complete the account application, provide proof of identification. Then you should select how you want to fund the account.

Research For The Best Stocks To Buy

The next step is researching on what stock is right for you. A good place to begin this journey is by researching companies that you know from your experiences as a consumer.

You can start with the company’s annual report like the management’s annual letter to its shareholders. This letter will show you a general narrative of the business and provide context for the numbers in the report.

Decide How Many Shares To Buy

It is much advised to start with paper trading, using a stock market simulator, to prepare for the main deal. With this paper trading, you can learn the basic like how to buy and sell stock using virtual money. But if you just want to go straight into it, then you can start small.

Choose Your Stock Order Type

The next step is to decide on the order type of your stocks. Below are the major order types you should come across:

Market orders

With this order, you are signifying that you will either buy or sell the stock at the best current market price. As this puts no price parameters on trades, your order will be executed immediately after your call. But may delay if you are trying to purchase million shares.

Limit orders

This order gives you more control over the price with which the trade is executed. Based on selling, a limit order lets your broker part with the shares once the bid rises to the level you have set.

Optimize Your Stock Portfolio

The main key to staying well in a long term is to keep your perspective and concentrate on things that you can control. Market gyrations are definitely not among them. But there are a few things in your control.

FAQS

Can I Buy Stock Online Without A Broker?

The answer is NO. One doesn’t require a broker to make purchase of stocks. But however, you do need a brokerage as the online storefront where you store the purchased stocks, bonds, exchange-traded funds (ETFs), and other investments.

How Do I Buy Stock On My Own?

Stocks can be bought or sold by anybody just by opening a brokerage account with one of the many brokerage firms. After creating the account, you should link it with your bank checking account to make deposits. And this in turn are available for you to invest in.

How Much Money Do You Need To Buy Stocks?

Basically, there is no minimum amount of money required to start investing in stocks. But you should budget about $200 to $1,000 to get started right. Several brokerages don’t require minimums to create an account and start buying stocks.

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