How To Buy Stock Online
If you have any desire to dabble in the stock market, you need to know how to buy stock online. The accessibility of the internet and the advent of the iPhone have made it possible to buy stock online from nearly anyplace in the world. Buying stock online requires just a little internet savvy and some research skills.
To buy stock online, you will need:
- A computer
- An internet connection
- Money to fund an online brokerage account
- Identification information to open an online brokerage account
- Find an online broker. Several standalone online brokerages exist. In addition, most large banks and credit unions now offer online access to brokerage accounts via their websites. A few clicks of the mouse when you log in to your bank account will bring you to the investments/online brokerage pages.
- Establish an online brokerage account. If you have an account at a bank or credit union which offers online brokerage accounts, signing up for one is easy. The bank/credit union already has all of your personal information, so it just takes a few minutes to fill out the appropriate online form. Standalone online brokerage accounts will require a little more information, typically a social security number, drivers license/ID number, full name and address.
- Transfer money into your account. Obviously, money is necessary to buy stock online. Once the online forms have been filled out and the account approved, the online brokerage account must be funded. This can be done by sending in a personal check, a money order, or electronically transferring money to the account. To electronically transfer money to the account, your bank account number and the bank’s routing number (both found at the bottom of personal checks) are required.
- Research potential stocks. Most online brokerages offer research into potential stock acquisitions. In addition, the Securities and Exchange Commission (SEC) provides annual and quarterly reports of public companies free of charge. Finally, it is possible pay and subscribe to many different research agencies. Determine what research you need to make an informed decision when buying stocks online and how much you are willing to spend (if anything).
- Purchase stock online with a buy order. Log in to your online brokerage account and fill out a buy order.
- Understand the other buy order types. There are several different options when buying stock online. The easiest, and most common, buy order is the market order. Market orders are executed as soon as you hit send at the prevailing market price (this will match, or be very close, to real-time stock quotes). Limit orders instruct your broker to buy a stock at a particular price. When buying stock limit orders are placed at a price below the current market price. The order will be executed when the stock falls to this price level.
- Understand other buy order options. Good Till Canceled orders remain in effect until you physically cancel them online. If you place a buy limit order, that order will remain in effect until the stock price drops to the limit you’ve set or you have canceled it. This means it could be executed today, tomorrow, next month, or even three months down the road. A Day Order is any order that is not a Good Till Canceled order – it expires at the end of the trading day. If the order is not executed, the online broker automatically cancels it.
Buying stock online has made the stock market accessible to everyday users. The availability of company information and second hand research allows anyone to become a stock market guru. If this interests you, sign up for an online brokerage account and buy stock online today.