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How to buy and sell stocks online

Consider fees, platform features and risks before you get started.

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Thanks to online stock trading platforms, buying and selling shares of company stock is easier than ever before. Here’s how to open a brokerage account to start buying and selling stocks on major US stock exchanges and around the world.

Step 1: Choose an online stock trading platform

Selecting an online stock trading platform, also called an online brokerage account, can be challenging. Why? Because there are dozens of platforms available with various features, fees and benefits to consider.

While platforms like Robinhood are aimed squarely at newbie investors, platforms like TD Ameritrade and Interactive Brokers step it up with sophisticated research tools for advanced traders.

There’s no shortage of online brokers to choose from, so start narrowing down your options by considering the following:

  • Commission fees. Luckily, most US brokers have eliminated commission fees on stock trades, but you may encounter commissions when trading mutual funds, options or futures. Commissions can be charged as a flat fee or a percentage of the total transaction cost.
  • Account fees. Brokers charge all kinds of additional fees to use their platform. The one you’re most likely to encounter is an account transfer fee — typically between $50 to $75 — which brokers charge when moving funds out of your account. But you may also encounter inactivity, subscription or foreign exchange fees, among others.
  • Tradable securities. Some platforms offer access to US-listed stocks and ETFs, while others — like Fidelity — offer access to international exchanges. What do you anticipate trading, both now and in the future? Make sure the broker you select can cater to your ongoing investment goals.
  • Research tools. The more active your trading style, the more technical and complex your research. Explore research tools across multiple trading platforms to make sure the brokerage you select can cater to your needs.
  • Experience level. Some stock trading platforms are designed with casual investors in mind. Others are designed for advanced traders and expect new account holders to hit the ground running with little instruction. If you’re new to the world of trading, opt for a platform that’s easy to navigate and rich in educational resources.
  • Customer support. Find out how to contact customer service, whether by phone, email or live chat.

Compare online trading platforms

Name Product Stock trade fee Asset types Option trade fee Annual fee
Stocks, Mutual funds, ETFs, Forex
$20 per year
Get a personal advisor when you open an account with at least $50,000.
Stocks, Options, ETFs, Cryptocurrency
Make unlimited commission-free trades in stocks, funds, and options with Robinhood Financial.
Sofi Invest
Stocks, ETFs, Cryptocurrency
A free way to invest in stocks, ETFs and crypto.
Interactive Brokers
Stocks, Bonds, Options, Mutual funds, Index funds, ETFs, Futures, Cash
$0 + $0.65/contract, $1 minimum
IBKR Lite offers $0 commissions, and IBKR Pro offers advanced tools for professional traders.
TD Ameritrade
or $25 broker-assisted
$0 + $0.65/contract,
or $25 broker-assisted
TD Ameritrade features $0 commission for online stock, but watch out for high short-term ETF and broker-assisted trading fees.

Compare up to 4 providers

Step 2: Sign up for an account

Opening an account is usually free, but some providers may charge subscription or ongoing fees for premium features like market research.

When you open an online, expect to provide the following information:

  • Your name, address, date of birth and contact details
  • Your Social Security number
  • Proof of ID
  • Linked bank account details

Most platforms require a minimum deposit to open an account. Once approved, it’s time to start trading.

Step 3: Choose the stocks you want to buy

Start researching stocks that match your investment goals. To help you make an informed decision, explore market research, analyst ratings and any trading recommendations your platform has to offer.

You’ll also want to consider the number of shares you want to buy — a number that largely depends on your budget and your investment goals. Many platforms require you to buy full shares, but fractional shares — an actual fraction of a single share — are becoming increasingly popular.

Stock screeners can help you narrow down your stock options by sector, industry, price range and more. You can search for companies by name or ticker symbol and if you’re on the fence about a purchase, you can add a stock to your watchlist to keep an eye on its performance.

How many shares should I purchase?

The ideal number of shares for your portfolio depends on your skill level and your investment goals. And while there’s no one-size-fits-all approach to investing, most US investors tend to hold between 10 to 30 different stocks. New investors typically hold fewer stocks, while experienced traders may feel comfortable monitoring a wider range of securities.

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Step 4: Place your order

There are two ways to purchase stock: a market order or a limit order.

  • Market orders. Place a market order when you want to buy a share immediately at the best price currently available. This method can be risky, though, especially if prices are volatile.
  • Limit orders. Place a limit order to set a maximum purchase price for your order. If that price becomes available within your specified time period, your trade is executed. Limit orders also have their risks — because if the stock never hits the price you specify, your order won’t be executed and you’ll miss the opportunity entirely. You can generally set your order for the day or until you decide to cancel it.

Once you’ve entered the specifics of your transaction, including the type of order you’d like to execute and the number of shares you’d like to purchase, submit the order.

Step 5: Pay for the transaction

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

Most online trading platforms require you to link a bank account to deposit money to invest, and it often takes two or three business days for that deposit to clear. However, some brokerages allow “instant deposits” that make it possible for you to invest the deposited amount right away while the deposit is processed. Credit cards are typically not permitted as a brokerage account funding method.

What happens after I buy a stock?

Once a stock is in your portfolio, you are considered a company shareholder. And you can either hold onto a stock, or you can sell it.

Buy-and-hold investors hold onto stocks in the hopes that they will eventually increase in value. They may hold a stock for months — even years — before they eventually sell it at a profit.

Active investors, on the other hand, may offload a stock quickly. Day traders engage in intraday trading, which involves buying and selling a stock over the course of a single trading day. Active traders aim to take advantage of minute changes in a stock’s price. This type of trading is complex, fast-paced and requires a comprehensive understanding of the market. It’s not a suitable trading strategy for beginners.

Ultimately, what you do with the assets in your portfolio depends on your investment goals, your trading strategy and your risk tolerance. Keep track of the performance of your investments by logging into your trading account.

When should I sell my shares?

When you decide to sell your shares is up to you, but most investors aim to sell shares at a profit — ideally, at the point in time in which it will be most profitable.

What makes stock trading difficult — and risky — is that it’s impossible to predict when or if selling a stock will be profitable. As an investor, you have no control over the market and stocks can be volatile.

A stock’s price may increase in value day-over-day, month-over-month, only to fall back to its initial trading value months after you make a purchase. And while stock prices are generally tied to the performance of the company they belong to, they can also fluctuate for a variety of other reasons, including political shifts, economic patterns, industry events and much more.

The right time to sell your shares boils down to your investment style and risk tolerance. But you’ll also need to factor in the type of stock you’ve purchased and its past performance. Does the stock come from a newer company with a history of high volatility? Or is it from a well-established company with steady gains and reliable dividends?

Factor in the type stock you hold, its past performance, analyst ratings and market news before you sell shares.

  • Tips when buying or selling shares

    To make the most of your online stock trading experience, consider the following:

    • Do your homework. Making informed trading decisions is crucial. Research the financial health and growth prospects of the companies you’re interested in by reviewing annual reports, company alerts, prospectuses and analyst ratings. Some trading platforms are better equipped for research than others, but you can also rely on third-party applications and market research websites, like Bloomberg or Yahoo Finance.
    • Follow the news. Understand the health of the economy, interest rate decisions, government policy changes, levels of investor confidence, exchange rates and the performance of stock markets in other countries. All of these can influence when to invest.
    • Buy what you know. If you don’t understand it, think twice before you buy in. Rather than investing in a company, industry or sector you know nothing about, start with industries and businesses you understand.
    • Diversify. A tried and true investment strategy utilized by many investors, both new and experienced, is to spread your investments across a range of industries. This is called diversification — a fancy way of saying: don’t put all your eggs in one basket. If you buy stocks across five or six industries instead of just one or two, you can be better protected against losses if one particular industry experiences a sharp downturn.
    • Explore blue-chip companies. Blue-chip stocks are America’s biggest, best-established companies, many included in the Dow Jones Industrial Average. They’re typically a source of reliable returns and minimal risk.
    • Consider growth stocks. Small companies, whether they’re listed on a stock exchange or traded over-the-counter, have a shorter business history. Some investors find these shares attractive because they offer the potential for large returns — but carry a significant risk of loss.
    • Pay attention to trading hours. If you place a market order after trading closes for the day, your broker may place the trade at open the next day — even if the price has significantly changed. Most US stock exchanges close a 4 p.m. ET, though some brokers offer after-hours trading.
    • Practice new strategies. Some platforms, like Webull and TD Ameritrade, offer paper trading, which is a simulated market that allows you to make hypothetical trades using up-to-date market prices. This is a practical way to test trading strategies without risking any real money.

    Risks of online stock trading

    Before you start buying and selling stocks, familiarize yourself with the common risks:

    • Losses. No investment is risk-free and any stock, no matter its performance history, carries the risk of loss. Stock prices can fall dramatically and even drop down to zero. This can mean significant financial losses for investors.
    • Time. Online trading can be a time-consuming process — especially when you hand-pick each of the securities in your portfolio. The more active your trading strategy, the more time you’ll need to be ready to invest in monitoring the performance of your stocks and staying abreast of impactful market news.
    • Stress. The stock market is always moving and can be volatile — a significant source of stress for those with investments that hinge on its performance and direction. If you can’t weather the ups and downs, you might be better off pursuing a more passive investment strategy, like a robo-advisor or managed portfolio.
    • Market events. Even after thoroughly researching a company, you can’t predict the future. Natural disasters, terrorist attacks, pandemics, bad company news and even changes in government policy can all occur unexpectedly and adversely affect the price of shares.
    • Lack of expertise. While investing in the stock market sounds easy in theory, it can get quite complicated if you don’t know what you’re doing. First-time investors should exercise caution while building their portfolio.

    Not ready to buy? Practice your trades risk-free with a stock-trading game

    Bottom line

    There are numerous ways to buy and sell stocks. But before you dive in, compare trading platforms, research the companies you want to invest in, learn about your investing options and plan out both your entry and exit points. And be prepared to follow your plan — even if emotions tell you otherwise.

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