How to Buy and Trade ETFs
An exchange-traded fund is an investment security that is bought and sold on the various stock exchanges in a manner that is indistinguishable from stocks. An ETF is a collection of assets that are held as one investment security and can contain a variety of stocks or other investment securities such as futures, currencies or commodities. Many popular ETFs track stock indexes or the price of precious metals. ETFs trade on stock exchanges throughout the day and their price is constantly fluctuating. To buy and trade ETFs, all one needs is an account with a stockbroker and the proper funds.
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Instructions
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Open an account with a stockbroker and deposit funds to use in trades. You may have to wait a few days before your funds are available to trade, depending on their source.
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Decide which ETF you wish to trade. Most stock brokerages will provide you with research tools that include stock and ETF screeners to help you narrow your investment choices based on your objectives.
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Enter a trade with the stockbroker. You can do this either online, in person or over the phone. When doing it in person or over the phone, your broker will walk you through the transaction. When trading online, you will need to know the symbol of the ETF you wish to trade and the quantity of the ETF that you wish to purchase. Once you enter this information into the broker's "Trade" screen, you will hit "Buy" and you will now own shares of that ETF.
To later sell the ETF, the process is similar, except you will be choosing to "Sell" instead of "Buy." If you want your trade executed immediately, ensure that you enter it during normal market hours, which are Monday through Friday from 9:30 a.m. until 4 p.m. (except holidays).
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