Very few barriers stand in the way to setting up your own stock trading account and making trades online yourself.
More online brokers are available than ever to choose from and the costs of trading stocks have essentially disappeared.
While buying and selling stocks online can seem intimidating at first, it’s a straightforward process you can complete in just a few steps.
How to buy stocks online in 4 easy steps
Choose an online broker. Consider usability, fees, investment tools and customer support when selecting a broker.
Sign up and fund an account. Provide your personal information and sign up. Then, link a bank account or transfer assets to fund your account.
Research and choose your stocks. Do your due diligence on potential stocks, considering your time horizon, risk tolerance and investing goals. Search for the stock by name or ticker symbol.
Selecting the right online broker is a the first step when buying stocks online. With numerous options available, it’s essential to consider factors such as fees, trading tools, research resources and customer service.
Here are some key considerations to guide your decision:
Fees and commissions. Most brokers no longer charge commissions to buy and sell stocks and exchange-traded funds (ETFs) online. Account fees are a different story. Compare inactivity fees, transfer fees and other miscellaneous account fees to avoid unexpected costs.
Trading platform. Evaluate the broker’s trading platform and interface — a user-friendly platform with intuitive navigation and robust features can enhance your trading experience. Look for features such as real-time quotes, customizable watchlists, advanced charting tools and order types. Mobile trading apps tend to offer a more streamlined trading experience, while desktop trading platforms are usually the most powerful.
Research and analysis. Consider the research and analysis tools provided by the broker. Access to market news, analyst reports, financial statements and educational resources can help you make informed investment decisions. Look for brokers that offer comprehensive research tools tailored to your investment needs and level of expertise. You’ll typically find that the big traditional brokers offer the most robust research tools.
Account minimums and requirements. Check if the broker has any account minimums or requirements for opening an account. Most don’t, but some may require a minimum deposit to get started.
Customer service and support. Assess the quality of customer service and support provided by the broker. Prompt and responsive customer support can be invaluable, especially if you encounter technical issues or have questions about your account. The best brokers offer phone and live chat options for prompt support.
Security and regulation. Ensure that the broker is regulated by reputable regulatory authorities and follows industry best practices for security and privacy. Look for brokers that offer account protection features such as encryption, two-factor authentication and insurance coverage for client assets.
By carefully evaluating these factors and comparing different brokers, you can choose a reliable and reputable online broker that meets your trading needs and preferences. Once you’ve selected a broker, you can proceed to open an account and start buying stocks online.
Our top broker picks for where to buy stocks online
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Step 2: Sign up and fund an account
Opening an account with an online trading platform is painless and usually takes just a few minutes.
While the exact format will vary from broker to broker, it must adhere to Know Your Client (KYC) standards: you must provide personal information to verify your identity and answer a handful of questions about your background, investing experience and goals.
This lets brokers and financial insitutions verify the identity and other credentials of customers to prevent money laundering and terrorism financing.
When you apply for a brokerage account, you take part in the KYC process. Personal information you can expect to provide include:
Your name, address and contact details
Your date of birth
Your Social Security number
Proof of ID
Employment information
Most brokers use an automatic KYC process, which means your application will often be approved instantly or within a few minutes. If a broker is unable to verify your information, you may be asked to submit proof of ID.
Funding your account While you can open an account with most brokers without a minimum deposit, you can’t trade until you have sufficient funds in your account to cover the cost of the transaction.
One of the easiest ways to do this is to link your bank account and transfer funds electronically via the Automated Clearing House (ACH) network. ACH transfers take between one to three business days to complete, but some brokers offer a feature called “instant deposits” or “instant buying power,” which lets you trade up to a certain amount before the funds have settled.
Other funding methods include wire transfer, check deposit and ACATS transfers from other brokers. Credit cards are typically not permitted as a brokerage account funding method.
Matt's tip on signing up with a broker
You are not confined to just one broker. If you're between two investing platforms and can't decide, open an account with both! This will not only let you take advantage of multiple sign-up bonuses (if available) but will also let you enjoy the benefits and features each broker has to offer.
Start is with an industry that interests you, and then explore the different companies in that space. Identify the industry’s biggest companies and key players, along with young companies with potential for growth.
But also figure out which companies are falling, or have fallen, out of favor. If you want to follow a Warren Buffett saying, “never invest in a business you cannot understand.”
Tools like stock screeners can help you narrow down stocks by sector, industry, price range and more. Search for companies by name or ticker symbol, and use watchlists to track potential investment opportunities.
Analyst research reports can give you valuable insight into companies and guidance as to whether a particular company may be a good investment at this time.
At the end of the day, you should perform as much in-depth research as possible until you’re comfortable investing.
With a stock in mind and funding in place, it’s time to invest. But before you invest, you should know how much money you want to invest in any particular stock or how many shares you’d like to buy.
Consider your budget, investment goals and your overall portfolio allocation.
With the advent of fractional share trading, you no longer need to pay the entire share price to invest. Fractional shares lets you invest much smaller dollar amounts in a stock — $1 with many brokers — instead of having to buy whole shares. Not every broker offers this feature though.
How many stocks should I purchase? The ideal number of stocks for your portfolio depends on your investment goals and level of desired diversification. Renowned value investor Benjamin Graham put this number between 10 and 30 stocks. New investors may hold fewer stocks, while experienced traders may feel comfortable monitoring a wider range of securities.
Types of stock orders There are two main ways to buy stocks online: placing a market order or placing a conditional order.
Market orders. Place a market order when you want to buy a stock immediately at the best price currently available. If you’re buying shares of a volatile stock, the price at which your order is executed can be different (higher or lower) than the last traded price.
Conditional orders. Place a conditional order, such as a limit order or stop order, when you want a stock to meet specific conditions before you invest. For instance, a limit buy lets you set a maximum purchase price for your order. If that price becomes available within your specified time, the broker executes your trade. But if the condition is never met, your order will go unexecuted.
Once you’ve entered your transaction specifics, including the type of order you’d like to execute and the number of shares you’d like to purchase, submit the order.
Dollar-cost averaging Dollar-cost averaging is a strategy investors use to mitigate the impact of market volatility when buying stocks online. Instead of investing a large sum of money all at once, investors gradually purchase stocks over time, typically at regular intervals.
For instance, let’s say you have $1,000 to invest in a particular stock. Instead of investing the entire $1,000 at once, you dollar-cost average by investing $100 every month for 10 months. Over the 10-month period, you’ve invested a total of $1,000 and accumulated shares at various prices — some low, some high.
This approach of consistently investing fixed amounts over time can help smooth out the impact of market volatility and can potentially lead to better long-term returns.
What about using a robo-advisor?
If you want to buy stocks online but would rather outsource portfolio management than do it yourself, then a robo-advisor might be an option.
Robo-advisors use algorithms to automatically invest in ETFs of stocks and bonds according to your investing experience, risk tolerance and timeline.
This passive investing approach can save you time and worry, as you don’t need to research stocks and can take the emotion out of investing and managing your portfolio.
WATCH: How to Buy Stocks Online: Step-by-Step Guide
*Since this video was published, TD Ameritrade was acquired by Charles Schwab and is no longer accepting new applicants.
How much does it cost to buy stocks online?
The cost to buy stocks depends on each specific trading platform.
Some online brokerages like Robinhood and Public charge no commissions to trade stocks while others require a minimum deposit just to open a trading account.
Before Robinhood pioneered commission-free stock trading, brokers charged anywhere from $5-to-$10 per trade.
But the overall cost to buy stocks online will include both trading costs and account fees. The best online trading apps charge no commissions and the fewest miscellaneous fees.
What happens after I buy a stock?
Once the broker executes your order, you’re a shareholder. Now just follow your investing plan.
The typical buy-and-hold investor holds on to stocks in the hopes that the shares will eventually increase in value. They may hold a stock for months or years before they decide to sell it — hopefully at a profit.
Active traders, on the other hand, may offload a stock quickly.
Specifically, day traders engage in intraday trading, which involves buying and selling a stock over a single trading day. The aim here is to take advantage of sudden 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, strategy and risk tolerance. Make sure to check in occasionally on your investments to track their performance and ensure your portfolio still aligns with your investment goals.
When should I sell my stocks?
The process of selling your stocks is equally as important as buying them. But not every investor follows the same playbook.
Some experts say you should consider selling your stocks if the company’s fundamentals change for the worse or if the competitive landscape changes. For instance, you may decide to sell your stock in a company whose earnings continue to steadily decrease or whose performance has dramatically weakened compared to industry peers.
Another reason to sell might be that you need the money for a more attractive investment.
In an ideal situation, investors want to sell at the point in time in which it will be most profitable. But timing the market is incredibly difficult, if not impossible, and can be costly. This is why it’s important to develop a strategy and stick to it.
What are the benefits of buying stocks online?
Lower fees and faster trades. Online trading is cheaper and faster than broker-assisted trades, which can cost upwards of $25 per trade.
Convenience. Sign up for an account in minutes and trade from your phone, laptop or anywhere with an internet connection.
Complimentary research and trading tools. Many online brokers provide free educational resources and research tools that can help you better understand the markets and investing.
Real-time updates. Monitor asset prices, stock market news and your portfolio from your phone, tablet or laptop.
Is it safe to buy stocks online?
It’s generally safe to buy stocks online.
Most online trading platforms employ safety measures like 24/7 infrastructure monitoring and two-factor authentication as standard protocols. Many also maintain a membership or good standing with the US Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC).
But, like with anything on the internet, there are still some things to watch out for:
Technical problems. Your ability to trade and invest depends on the underlying platform, its software and its servers. If you can’t access your account because of a server outage, you could miss an opportunity to buy or incur losses if you can’t sell.
Security concerns. Hackers constantly target online brokers, and a breach could result in the theft of personal and financial information.
Making rash investment decisions. Emotional investing and unfettered access to the market can lead to impulse trading, which can be costly. Traders can also get caught up in the excitement of fast-moving markets, investing too much too quickly and without first taking the proper time to understand the stock.
How to buy stocks online without a broker
You need a broker to buy most stocks online, though some companies offer direct stock purchase plans.
For instance, stock transfer company, Computershare, lets you new and existing shareholders purchase stocks in companies like Nike (NKE), Coca-Cola (KO) and Walmart (WMT) directly without a broker.
Here’s how to buy stocks online without a broker using Computershare:
Go to Computershare’s US website and select Make a stock purchase.
Select a company to invest in and review that company’s direct stock purchase plan details. Select Invest Now when ready to invest.
Complete the investment details by providing the frequency of your investment, amount and withdrawal schedule. Select Next.
Enter personal information such as your name, Social Security number and contact information to create a new user profile. Select Next.
Choose your tax status, provide your bank account information and choose a dividend reinvestment frequency.
Review your information and submit
Compare more online stock trading platforms
Compare brokers by available asset types, minimum deposit, stock trade fee and more. Select Go to site to sign up for an account or select More Info to read our comprehensive review.
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Finder is not an advisor or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Bottom line
Buying stocks online is simple and quick and can be done from anywhere with an internet connection. Look at investment options, fees and features when comparing brokers to narrow down your search. You may ultimately need to open an account with several brokers to see which is right for you.
Frequently asked questions
How do I start buying stocks online?
The process to start buying stocks online is quite simple and starts with opening an account with a brokerage. With an active account, research and choose the stocks you want to buy, fund your account and place your order.
What stocks can I buy online?
All types of stocks are available online, but the access to those stocks will depend on the asset types your broker offers. For instance, US exchange-listed stocks from popular indices like the S&P 500 are available on most platforms, but not every broker offers access to over-the-counter and penny stocks or, say, foreign-listed stocks.
How do beginners start buying stocks?
Beginners can start buying stocks online by setting up an investment account with a brokerage firm. Brokers that offer fractional share trading let you invest with as little as $1 or $5.
Can I buy stocks with $100?
Yes, you can absolutely buy stocks with $100. As of August 3, 2023, at least 227 S&P 500-listed stocks traded for under $100, according to Finviz data. With fractional share trading, you can buy slices of stocks often for as little as $1.
Can I change or cancel my order?
You can change market orders any time prior to submission. Once executed, you cannot reverse a market order. Investors can change or cancel standing orders, such as a limit order, any time before the order has been filled.
Matt Miczulski is an investments editor at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University. See full bio
Matt's expertise
Matt has written 208 Finder guides across topics including:
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