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All reviews are prepared by our staff. Opinions expressed are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including any rates, terms and fees associated with financial products, presented in the review is accurate as of the date of publication. SHARE: tdub303/Getty Images March 24, 2022 Bankrate reporter Brian Baker covers investing and retirement. He has previous experience as an industry analyst at an investment firm. Baker is passionate about helping people make sense of complicated financial topics so that they can plan for their financial futures. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money. Investing disclosure: The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal. Bankrate logo Editorial integrity
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1 Open a brokerage account
If you’re buying stocks online for the first time, you’ll need to open a brokerage account at one of several brokers such as , , or . The process of opening an account is fairly straightforward and shouldn’t take much more than a few minutes. You’ll need to provide basic information about yourself and any other people on the account. (You can also check out to see more options.) 2 Fund the account
The next step is to actually put money into your account so that you have funds to invest. This can be done by sending a physical check through the mail, but it’s much more convenient to set up an . To transfer funds electronically, you’ll provide the account information and the financial institution where you’d like to transfer money from. Your money should arrive in your account within a few days. 3 Research stocks you re interested in
Before buying any stock, you’ll want to do some on the companies you’re considering. Make sure to read the company’s annual report, or 10-K filing with the , as well as the most recent quarterly reports to get a better understanding of the business and how it’s performing. Before you make a purchase, you should be able to explain how a company makes money, its position relative to competitors, and what you think the next three to five years are likely to look like for the business. Be sure to pay attention to valuation, or what you’re paying compared to what you’re getting as a shareholder. 4 Place a trade order
Once you’ve zeroed in on a stock to buy, you will need to place a trade order. . Here are the two most common types: Market order: A market order means your trade will be executed immediately at the best available price. This type of order puts no price parameters around the order, so the price you ultimately pay may be higher or lower than the most recent quote. Market orders are best used for highly liquid companies that trade lots of shares each day because your order is unlikely to move the stock price in one direction or another. Limit order: This order type will execute your trade only at a specific share price or better. For example, if you place a limit buy order at $10.00, the trade won’t go through unless someone is willing to sell at $10.00 or lower. This gives you more certainty about the price you’re paying going into the trade, but you’ll run the risk that the price never reaches your limit. Limit orders are good for stocks that don’t trade very many shares and where your order might influence the share price. This would typically occur with small or micro-capitalization stocks. Limit orders are also useful for stocks with wide bid/ask spreads or high volatility. You will also face choices on how long you want the trade order to be valid for and whether you want the order to be “all or none,” which means the order won’t be filled unless you can purchase all the shares you’ve asked for. Orders are valid for the rest of the trading day or are “good till cancelled,” meaning the order will usually stand open for 60-90 days or until it’s filled. Is it safe to buy stocks online
Yes, it is safe to buy and sell stocks online as long as you’re using a reputable broker. You even have some protection in the event that the brokerage firm fails thanks to the (SIPC). The SIPC was created in 1970 and protects customers at SIPC-member brokers for up to $500,000 in all accounts at a firm, including a maximum of $250,000 for uninvested cash. Where can you buy stocks online for free
You can buy stocks without paying commissions at most online brokers these days. Charles Schwab, and all offer commission-free trading in stocks as well as ETFs. Robinhood even offers commission-free trades in options and . Can you buy stocks online without a broker
Opening an account with an online broker is going to be the easiest path to online investing. Some companies allow investors to purchase shares directly from them and participate in , but online brokers are a good choice for most people. They offer easy-to-use platforms and commission-free trading. Signing up for a new account should only take a few minutes. What do you need to buy stocks online
Fortunately, not too much. You’ll need a brokerage account with an online broker, which can be opened in just a few minutes with some basic personal information, as well as a way to fund your account. Funds can be deposited by check or through an electronic transfer. What stocks should and shouldn t be traded online
If you understand the business of the company you’re buying, almost no stocks are off-limits for online trading. , tech stocks, and everything in between are all available to trade online. You can even , but most brokers still charge a small fee for that. Make sure to do your research before making the plunge, otherwise you’re just speculating. However, , which the SEC defines as stocks that sell for less than $5 per share, should be viewed with caution because they can be particularly volatile and are ripe for manipulation. How much money do you need to buy stocks online
Not very much. Most online brokerages don’t have minimum requirements to open an account and through the trading of , investors can now buy into their favorite companies for as little as $5. With many of today’s leading companies’ shares selling for hundreds or thousands of dollars, some brokers offer investors the chance to buy a portion of a share for just a few dollars. Bottom line
Buying stocks online is a fairly simple process once you understand a few key terms and processes. But just because it’s simple doesn’t mean it’s easy. Make sure to carefully research any company before buying (or selling) its stock to better understand the risks that come with investing in individual shares. Learn more
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation. SHARE: Bankrate reporter Brian Baker covers investing and retirement. He has previous experience as an industry analyst at an investment firm. Baker is passionate about helping people make sense of complicated financial topics so that they can plan for their financial futures. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.