A beginners guide to share dealing

Find the best share dealing account for you

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Whether you’re an experienced trader or a complete beginner, a share dealing account could help you to add value to your portfolio. If you want to learn more about buying, holding and selling shares, then you’re in the right place.

Compare share dealing platforms

warning iconWarning: The value of investments can go down as well as up so you may not get back the money you invest. Please ensure you understand the risks.

Updated September 16th, 2019
Name Product Price per trade Frequent trader rate Platform fees
£1.75 + 0.022% (max £5.00)
£1.75 + 0.022% (max £5.00)
Portfolio transfer fees (in & out)
Your capital is at risk.
eToro Free Stocks
eToro Free Stocks
0% commission, no markup, no ticket fee, no management fee
N/A
Withdrawal fee & GDP to USD deposit conversion
Your capital is at risk. 75% of retail CFD accounts lose money.
from £7.50 on the Frequent Dealer Option (or 1% minimum £7.50)
£24 per quarter
£2.00 for a Share Account
Your capital is at risk.
From £7.99 on the Investor Service Plan
From £7.99 on the Investor Service Plan
No transfer fees or exit fees. £9.99 a month on the Investor Service Plan
Your capital is at risk.
£8
From £5
£0 - £24/quarter
Your capital is at risk.
£11.95
£5.95
Transfer out fee
Your capital is at risk.

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What is a share?

Let’s start at the start. A share is basically a portion of a company. When you buy a share you’re buying a small portion of the company.

Okay, so what is share dealing?

Share dealing is a form of investing. It means you buy company shares, and hopefully make a profit by selling the shares on for a higher price later down the line. There’s always risk involved though, and sometimes shares lose value.

How to buy shares

The simplest option available is to buy shares online through a “share dealing platform” (or broker).

Most platforms let you purchase shares from any company listed on the stock exchange.

There’s the London Stock Exchange, which includes the big names like Barclays, Vodafone, easyJet and Sainsbury’s. The FTSE 100 Index shows the top 100 companies listed on the London Stock Exchange.

Then you’ve got the Alternative Investment Market (AIM) which is a subsidiary of the London Stock Exchange. The AIM lists new, growing companies that are less well known.

Only companies which have ‘floated’ on the stock exchange can sell shares publicly. If you see it listed, you can buy shares in it! It’s that simple.

Once you’ve identified the shares you want to buy, you’ll have to set up a share dealing account, and link it up to your bank account or deposit money in it to buy the share.

We’ve got a full start-to-finish guide on how to buy shares which you might find helpful.

What does 'floated' mean in investing?

Companies usually get listed on the stock exchange when they’ve done an Initial Public Offering (IPO). This can also be known as floating, flotation, or just ‘going public’. There are other ways a company can become listed, for example by being taken over by an already listed company.

How to hold shares

Most online share dealing platforms hold your shares on your behalf. This means you’re still the legal shareholder, but your name won’t appear on any company’s share register.

In your early days of investing, it’s tempting to check your shares all the time. But as time goes and your portfolio grows you’re likely to forget – so keep a track of everything!

If you’re building your own portfolio it’s important to check things regularly and make adjustments to respond to real-world events.

How to sell shares

Selling shares is simple too. Most share trading accounts let you sell shares in two ways:

  1. Sell a certain number of shares.
  2. Sell a certain value of shares

Once you decide to sell and place your deal, you’ll be quoted a price. This price isn’t usually locked in, just an indication of the price at that time. The money you get may not be the exact same amount.

What costs should I look out for?

After you’ve set up an account you’ll be able to browse for shares to buy. You can select to purchase shares based on quantity, or based on value. Once you’ve purchased your shares, they will appear in your portfolio.

It goes without saying that online share dealing platforms need to make money. The main way they do this is through various fees and charges.

Here’s a list of some of the ones to look for:

  • Account fee: This charge might be monthly or annually.
  • Inactivity fee: Some platforms will charge you if you stop trading, but this is a decreasing trend as more providers compete for customers.
  • Price per trade: This is what it sounds like. The more often you trade, the more likely you’ll get a discount on this.
  • Stamp Duty Reserve Tax (SDRT): UK shares traded electronically incur 0.5% SDRT.

We’ve also got a more comprehensive guide on investment fees that’s worth checking out for more info.

How do I choose the right platform?

When deciding on a share dealing broker/platform, there are several points to keep in mind, including the following:

  • How regularly you plan on buying and selling shares
  • How much you want to spend on shares

Frequently asked questions

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Warning: The value of investments can fall as well as rise, and you may get back less than you invested. Past performance is no guarantee of future results.

*Disclaimer: The offers compared on this page are chosen from a range of products finder has access to track details from and is not representative of all the products available in the market. Unless indicated otherwise, products are displayed in no particular order or ranking. The use of terms ‘Best’, ‘Top’, ‘Cheap’ including variations, are not product ratings and are subject to our terms of use. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.

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