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How to buy stocks in a company

Want to know how to buy stocks from Canada? Follow these 7 simple steps to be a shareowner.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

How to buy stocks

Buying stocks in a company is actually pretty simple. Even you can do it! Follow these 7 simple steps to get started:

  1. Choose an online stock dealing platform
  2. Sign up for an account
  3. Choose the stocks you want to buy
  4. Place your order to buy stocks
  5. Pay for the transaction
  6. Monitor the performance of your stocks
  7. Sell your stocks (if you want to)

Step 1: Choose an online stock dealing platform

First thing’s first, you’ll need to find a broker to buy and sell stocks. These days, most people go for an online stock trading platform (also known as an online broker), although you can still find brokers that work face-to-face or over the phone in Canada.

The right online stock trading platform for you will depend on how confident you are when investing, whether you want to do it all yourself, and what fees are involved for the volume of stock trading you’re looking at.

Ask yourself these questions to help you choose:

  • Are you happy to buy and sell stocks on your own?
  • Do you want to be given ideas or are you happy to find them yourself?
  • How much research and information do you need?
  • What is the pricing structure?

Your choice could also depend on what else you want to trade. Will you be buying funds (such as electronic funds transfers, or ETFs) alongside individual stocks, for example? Do you use investment trusts? Check that the online broker you pick can meet your needs.

Use our table to compare some of Canada’s leading brokers

Name Product Available Asset Types Stock Fee Option Fee Account Fee ETF Transaction Cost Feature Table description
OFFER
Wealthsimple Trade
Stocks, ETFs
$0
N/A
$0
Free
Get a $50 bonus when you open a Wealthsimple Trade account and deposit and trade at least $100.
Pay no commissions when you trade Canadian stocks and ETFs with Wealthsimple Trade.
Scotia iTRADE
Bonds, Options, Mutual Funds, ETFs, GICs, International Equities
$4.99-$9.99
$9.99 + $1.25 contract ($4.99 + $1.25 contract if completed 150 trades or more a quarter)
$0
$9.99 ($4.99 if completed 150 trades or more a quarter)
Pay no annual account fees.
Buy, sell and trade ETFs, Equities, Options and more with competitive commissions.
CIBC Investor's Edge
Stocks, Bonds, Options, Mutual Funds, ETFs
$4.95 - $6.95
$4.95 - $6.95 (+$1.25 per contract)
$0 if conditions met, otherwise $100/year
$6.95
$4.95 - $6.95 is applicable for online stock, ETF and option trades only. Pay $4.95 when you qualify as an Active Trader (trade 150+ times per quarter).
An intuitive and easy-to-use platform with access to a variety of tools that help you make smart decisions and trade with confidence.
Interactive Brokers
Stocks, Bonds, Options, ETFs, Currencies, Futures
Min. $1.00, Max. 0.5% of trade value
$1.50 min. per order
$0
Min. $1.00, Max. 0.5% of trade value
Extensive trading capabilities and global investment tracking.
Access market data 24 hours a day, six days a week and invest in global stocks, options, futures, currencies, bonds and funds from one single account.
Questrade
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs, International Equities, Precious Metals
$4.95-$9.95
$9.95 + $1 per contract
$0
Free
Get $50 in free trades when you fund your account with a minimum of $1,000.
Opt for self-directed investing and save on fees or get a pre-built portfolio and take some of the guesswork out.
Qtrade Direct Investing
Stocks, Bonds, Options, Mutual Funds, ETFs, GICs
$6.95 - $8.75
$6.95 - $8.75 + $1.25 per contract
$0 if conditions met, otherwise $25/quarter
$0 - $8.75
Trade 100 select ETFs free of charge.
Qtrade Direct Investing offers low trading commissions and an easy-to-use platform with access to powerful tools and a wide selection of investment options. Trade 100 ETFs free of charge and thousands more for $8.75 or lower.
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Compare up to 4 providers

Name Product Minimum Opening Deposit Commission Available Markets Platforms
Blackbull Markets
US$200
$0 - $6.00 R/T per Lot
Forex
Metals
Commodities
MetaTrader 4
CFDs are leveraged products which involves greater risk than using cash resources only. You could lose all or more of your initial investment. Trade forex, CFDs and commodities with Blackbull Markets.
Forex.com
US$100
Minimum US$25
Forex
Metals
Commodities
Indices
Shares
Forex.com Desktop, Forex.com Web Trading, Forex.com Mobile Trading, MetaTrader 4
CFDs are leveraged products which involves greater risk than using cash resources only. You could lose all or more of your initial investment. Trade 80+ currency pairs and 220+ CFDs in equities, commodities and indices on Forex.com.
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Compare up to 4 providers

Step 2: Sign up for an account

Once you’ve chosen a platform you’ll need to register for an account. This step is usually free, but keep in mind that some providers may charge subscription fees or other ongoing fees for features such as market research.

The registration process takes place online and if you’re a new customer you’ll usually need to provide:

  • Personal details. This includes your name, email, date of birth, address, Social Insurance Numbers (SIN) and employment status.
  • Government ID. Your passport or driver’s license will likely be acceptable.
  • Payment details. This is the debit card, credit card or bank transfer information you’ll use to fund your stock trading account.

Step 3: Choose the stocks you want to buy

To begin with, you should identify companies on the stock market whose stocks you want to buy, and then monitor the stock performance over time.

When re-evaluating the company before you invest, ask yourself some questions. Has the stock price changed since you first looked at it? If so, are you happy to buy it at the new price? It’s worth checking the headlines or recent company announcements to make sure no new risks have emerged. And remember, only invest what you can afford to, as the value of stocks can go down as well as up.

In general, if you’re starting out, invest in companies you understand. The latest technology stock may look really good, but do you understand how it makes its money?

Equally, make sure you’re buying for the right reasons – is it because you want exposure to a fast-growing company or just because someone has told you it seems like a good idea?

What are Canada’s blue chip stocks?

Step 4: Place your order to buy stocks

Once you’ve decided which stocks to buy, purchasing them is usually the easy bit! If you’re in your online account, you’ll get offered a price and can just click a button to “buy now.” You’ll receive a contract note shortly afterwards.

Step 5: Pay for the transaction

You’ll need to have sufficient funds in your online stock trading account to cover the cost of the transaction, including the brokerage fees that apply.

A bit about dealing charges

Typically, you’ll pay a one-off charge for buying and selling stocks. If this is a fixed amount (say ten dollars or less), it becomes more economical on larger stock purchases.

Alternatively, some brokers charge a percentage of the assets that you hold on the platform. You’ll need to crunch the numbers to work out which one of these options is likely to suit you best.

Step 6: Monitor the performance of your stocks

There are 2 ways you make money from investing: 1 is from an increase in the capital value of the stocks, the other is when the stocks pay dividends.

You’ll need to monitor the performance of your stocks, and the frequency with which you monitor them will depend on your investment strategy. For example, if you have a long-term investment strategy, you may only check in and see how your stocks are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week. Whichever option you choose, you can review the performance of your investments by logging into your online trading account.

You may also want to set limits on your stock trades. For example, you could set an automatic sell if the stocks lose more than 10% or gain more than 50% of their value. This will limit how much money you can lose, or it may prompt you to sell out when the stocks get ahead of themselves.

What are dividends and how do they work?

Step 7: Sell your stocks (if you want to)

When you decide to sell your stocks, the process is very similar to the method of buying stocks described in Step 4. When you’re logged into your online trading account you’ll be able to select an option to sell your stocks at the current market price. You will receive the appropriate confirmation that your stock has been sold, and the revenue from the sale will arrive in your online account.

And that’s it, you now know how to buy stocks in Canada! All that’s left to do is put these steps into action and you’ll own stocks in a company in no time.

Online stock trading

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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