How to Buy Stocks Online

If you want to buy stocks online, use this guide to get started today.

Buying stocks online is a quick, easy and affordable way to start investing in the stock market. If you’re a newbie, however, you’ll need to learn the ins and outs of how to trade stocks online to succeed.

First, review these steps that show you how to buy stocks online. Next, learn about some of the best online broker services to start investing online.

Steps to Buying Stocks Online

Although choosing the right stocks and investments can be challenging — and the stock market can be unpredictable — buying stocks online is a straightforward process.

Here’s how to buy a stock online:

1. Find an Online Broker

Decide if you want to use a discount broker. If you’re just starting out with investing and are unfamiliar with the stock market, if might be wise to seek the advice of an experienced investor who can help you with basic stock tips.

However, if you’re already familiar with the market, comfortable doing your own research and want to buy stocks online, online brokerage firms can help you make your first online trade immediately. Using discount brokers offers several advantages. You get the convenience of investing online and you can easily diversify your portfolio by choosing from a variety of different investment options.

You can start trading at relatively low fees. As a rule, discount brokers are far cheaper than normal brokers — and stock-trading services like Robinhood allow you to do free stock trading.

Related: 13 Investing Tips for Beginners

2. Choose How Much to Invest

It can be tempting to put a large sum in the market in hopes of getting a big return. But if you’re new to the market, understand that stocks are always volatile, and it’s not a good idea to pour all your money into a single type of investment.

Know what you’re buying — for instance, penny stocks can be especially volatile. Avoid risky stocks and investing too much money at one time — after all, you never know when the next big crash will happen.

3. Open an Account

Opening your account should be a straightforward process — most platforms provide detailed instructions. You might have to deposit funds before you begin trading, and some platforms will charge you a fee to open or maintain an account. Make sure you research all fees and try to find a company that doesn’t charge them.

4. Pick Stocks You Want to Trade

Rather than investing in a large number of stocks, keep a limited portfolio. Keeping 10 to 15 stocks that you know well in your portfolio is the way to go, according to Jim Cramer, host of CNBC’s “Mad Money.” And you should always have a solid understanding of what you’re buying.

Find Out: Jim Cramer’s 10 Best and Worst Investing Tips

5. Choose What Type of Order You Want

When you purchase stock shares, you’ll have to choose between a market order and a limit order. A market order doesn’t enable you to control the price of your order — the online broker buys shares at the next available price in the market. A limit order enables you to buy or sell securities at a specified price — the broker will not make the purchase until the stock price falls to the level you specify.

6. Finalize Your Order

Once you’ve settled on your stock order, submit it. After that, you can track your investments and their returns. Many online brokers offer mobile apps so you can track your stocks on the go.

Related: 12 Best Apps for First-Time Investors

Best Online Brokerages

You have a number of trading options with online brokers — many offer mutual funds, bonds and exchange-traded funds in addition to regular stocks. To help you narrow your search and decide which service to use, check out the following information on some of the best online stock brokerages.

Here are the best online brokerages for your investments:

Interactive Brokers

Interactive Brokers came in second — behind only Fidelity Investments — on Barron’s 2017 list of best online brokers. A popular site for international investing, the platform charges just $0.005 per share for trades, with a minimum of $1. Designed for active traders, the firm charges a minimum monthly activity fee of $10 for accounts with balances of at least $2,000 and $20 for accounts with less than that.

OptionsHouse

One major appeal of OptionsHouse is its low commission rates — most notably $4.95 for stocks and $1.50 for futures. It offers a mobile app that can alert you to earning announcements and insider trades on the companies in your portfolio.

TD Ameritrade

TD Ameritrade offers online stock trades for a competitive rate of $6.95. New investors get free trading for 60 days when you deposit at least $3,000. In addition, you’ll get bonus cash for larger deposits.

For experienced traders, TD Ameritrade offers advanced trading platforms — like “thinkorswim” — that come with sophisticated investment tools. The company also provides real-time streaming and level II quotes for free.

Learn: Pros and Cons of Online Trading

TradeStation

TradeStation is another brokerage that might make sense for experienced investors. State-of-the-art technology is TradeStation’s biggest draw and as for pricing, you can choose from several options, including a $5 fee for each transaction.

E-Trade

E-Trade offers professional and mobile trading platforms, free analyst research and dedicated trading support from futures, options and fixed-income specialists. At $6.95 per equity trade, E-Trade is competitively priced and it offers promotional rates to new investors along with a large selection of commission-free ETF and mutual fund trades.

See: 10 Stocks for Beginners to Try in 2017

Scottrade

Beginners might take advantage of the Scottrade website to learn about stock analysis. You can also use its more advanced platforms like ScottradePRO and ScottradeELITE, which offer streaming market data, more advanced market insight and research speed or professional support to help you figure out the best stocks to buy. The Scottrade mobile app is another perk from this company.

Start Buying Stocks Online

Learning how to buy stocks online can be easy and fun, even for beginner investors. The most important step to take as you start investing online is to do your research and decide how much risk you’ll take. Then, choose a broker that best fits your needs. The rest is just a click away.