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Here are Some Pointers
Investors usually use brokers for buying stocks. Trading is also commonly done by them. To start, set up an account with your chosen stock firm. Firms, such as Smith Barney and Charles Schwab have brokerage accounts, which can be easily managed either online or through a broker. When trading online, E-Trade and Ameritrade can be used as electronic brokerages sites, but most larger firms can offer online options, too.
Once your account is opened, you can manage your stocks online or through your broker. Managing your stocks means deciding which types of stocks to buy and how many units to purchase. If you are using a broker, a commission will be charges, normally a few cents per share of stocks traded. You will also be charged with commission fees when trading online, but online sites usually charge lower fees compared to personal brokers.
Once you have chosen the stocks you want to buy, you may choose to either limit order or market order. When you say ‘limit order’, you ask to buy a stock but only within your limit price. For instance, you want to buy a Walmart stock at $50 per share, but the current price is $70, your broker would have to wait before the price per share lowers within your price limit. A ‘market order’, on the other hand, means that you allow your broker to purchase your desired stock at the existing market price. Apart from buying the stocks via a broker, you can also buy stock straight from the company.
Tips on Buying Stocks
- Weigh the advantages of having a face-to-face broker versus trading stocks via an online stocks firm.
- Decide on which stock you want to buy, as well as the prices that you would like to buy at. This will help you know if you will go for the market order or the limited order.
- Save broker fees by buying stocks straight from the company.
