Not Financial Advice: Investors most usually buy and trade stock through brokers. You can set up an account by depositing stocks or cash in a brokerage account.
A firm like Charles Schwab offers brokerage accounts that can be managed online or with a broker in person.
If you prefer selling and buying stocks online, you can use sites like Ameritrade or E-Trade. Those are just 2 of the most famous electronic brokerages, however many large firms have online options as well.
Once you open an account, you will tell your broker what types and how many stocks you’d like to purchase. The broker performs the trade on your behalf. In turn, the broker earns a commission, usually several cents per share.
Online trading sites normally charge lower commission fees, because most of the trading is done electronically.
After selecting the stocks that you want to acquire, you can either make a market order or a limit order. A market order is one in which you request a stock acquisition at the prevailing market price. A limit order is when you request to purchase a stock at a limited price.
While purchasing stocks through a broker has its benefits, there are other ways to buy stock. You can buy stocks directly through the company. Sites like DRIPInvestor.com will show a list of companies that allow direct-buy of stocks.
The price of some stocks, especially recent "hot" IPOs and high tech stocks, can soar and drop suddenly. In these fast markets when many investors want to trade at the same time and prices change quickly, delays can develop across the board.
Executions and confirmations slow down, while reports of prices lag behind actual prices. In these markets, investors can suffer unexpected losses very quickly. Check out these tips for online investing at SEC.gov.