How to buy stock

By mani / Published on Sunday, 29 Jan 2017 18:43 PM

Investors or traders buy and sell stocks through brokers.

You need to open an account through a registered broker. There are many brokers registered with an exchange available in the country. Choose wisely based on brokerage they are offering and the infrastructure they are providing.

Once you open an account you can ask your broker what stock you want to buy at what quantity. The broker executes the trade on the your behalf. In turn, the brokerage earns a commission as discussed while opening account. There are many online brokers who offer lowest brokerage.

After selecting the stocks that you want to purchase, you can either make a “market order” or a “limit order.” A market order is one in which you request a stock purchase at the prevailing market price. A limit order is when you request to buy a stock at a certain price. For example, if you want to buy stock in a company abc at $100 a share, and the stock is currently trading at $99, then the broker would wait to acquire the shares until the price meets your requested price $100.

There are other ways to buy stock. You can purchase stocks directly through the company too. Purchasing through broker has its own advantages.

Disclaimer: The given information is for education purpose only. Please consult your financial advisor before taking any action.