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Home Buying Stocks Online
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Written by Administrator   
Thursday, 26 March 2009 02:38

Buying stocks online

The first time you open a broker account, the prospect of taking that first step and buying a stock online can be a little intimidating. Lets face it, for many people this is their first venture into the world of investing, and it can be somewhat overwealming trying to get familiar with new terminology, figuring out how the stock market works, and what stocks to buy. That's understandable, and it's a little nerve racking putting a chunk of your own money on the line when you're not totally sure what you are doing!

The good news is that the process of buying stocks is very simple. Lets suppose you want to invest in Microsoft. All you need to know is the ticker symbol (which for Microsoft is MSFT), and how many shares you want to buy. If you want to buy 100 shares, all you need to do is enter in a buy order for 100 shares of MSFT, and decide whether you want to place a market order or a limit order. A market order means you will pay close to the last trade. For example if Microsoft is trading for $27.50 a share, with a market order you'll likely pay close to that price, perhaps somewhere between $27.45-$27.55, although it could be more or less. A limit order means you want the pay a specific price. In this example, lets say you wanted Microsoft but you only want to pay $27.00. So you would put a limit order in for 100 shares at $27.00. This is a good way to get the stock at a lower price. However, there's no guarantee your order will ever be filled. If the stock goes up to $29.00 and continues higher, the odds of your order getting filled may go down accordingly. So, it really depends on how bad and how quickly you want the shares as to whether you would use a market order or a limit order.

Below is a screen shot of the typical entry screen of most online brokers so you can see for yourself how easy it is:

Anyway, once you place the order and it gets filled, you will see 100 shares of MSFT in your account and it should be shown at the current market price. Selling shares is just as easy, when you want to sell MSFT all you do is enter a sell order for 100 shares, and indicate market order or limit order if you want a specific price.

That's it. Pretty simple, eh? :-)

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Last Updated on Sunday, 29 March 2009 14:23