How to Buy Shares Online in the USA
The online purchase of shares of stock is a straight forward process. The important decision when buying stock is which stocks to purchase. Your investment decisions should be make with an understanding of the potential and risks involved.
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Instructions
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Select an online stock broker. The link below for the Smart Money 2009 Broker Survey outlines the magazine's picks for best brokers in different categories. Pick the one that fits your requirements for account minimums, commissions and research support.
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Complete the online account application for the broker you have selected. The application will require your social security number, address, phone number and employer information. Regular accounts should be approved immediately. Make a note of your account login name and password.
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Send money to fund your stock broker account. Money can be deposited in online broker accounts by wire transfer, electronic deposit from a checking or savings account or by mailing a check. Follow the directions on the broker's how-to-deposit money web page.
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Use the brokers online trade screen to place your orders for shares of stock. The trade screen will require the stock ticker symbol and the number of shares you want to purchase. A market order will purchase shares for your account at the current market price. A limit order allows you to set the price you are willing to pay. Limits orders are only filled if a seller agrees to the price or the share price moves to the limit level.
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Check your account summary screen to verify your order has been filled and at what price. You now own shares of your selected stock in your online brokerage account.
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Tips & Warnings
Stocks traditionally trade in round lots of 100 shares. Modern electronic trading has made round lot trading a non-issue. If you want to buy 10 shares or 327, place the order and it will be filled.
Stock share trades take three days to settle or become official. You can actually buy shares and have three days to deposit the money. In a new account it is best to have the money deposited before buying your first shares.
Buying shares of stock can result in significant losses of the money invested. Investors buying shares online need to do their own research and understand the investment risk before placing any trade.
References
Resources
- Photo Credit business charts with buy image by Andrew Brown from Fotolia.com
