How to Buy Your First Stock Online
Open an account with a brokerage firm
To buy stocks online, you need an account at a brokerage — a company that holds your money and executes trades on your behalf. You choose the brokerage, create an account, and deposit cash. The brokerage then lets you place orders to buy and sell stocks through their website or app.
Common brokerages include Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, and Robinhood. Each charges different fees, offers different research tools, and has different account minimums (some have none). You can open an account in 10 to 20 minutes by providing your name, address, Social Security number, and employment information.
After you open the account, you'll link a bank account and transfer money in. Most transfers take one to three business days to settle. Some brokerages offer fractional shares, meaning you can buy a portion of a stock if you don't have enough cash for a full share.
Key Takeaways
- You need a brokerage account to buy stocks; the brokerage holds your money and executes your trades through their website or app.
- Opening an account takes about 20 minutes and requires your name, address, Social Security number, and employment details.
- After you fund your account, you search for a stock by its ticker symbol, decide how many shares to buy, and place an order.
- Most online brokerages charge no commission on stock trades, but some charge fees for certain account types or services.
- Your order executes during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), and you own the shares immediately after.
Search for the stock and place an order
Once your account is funded, log into your brokerage and look for the "Buy" or "Trade" section. You'll search for a stock using its ticker symbol — a one- to five-letter code that identifies the company. Apple's ticker is AAPL, Microsoft is MSFT, and Amazon is AMZN.
When you find the stock, you'll see its current price and a form asking how many shares you want to buy. You enter the number of shares, review the total cost (share price times number of shares), and submit the order. The brokerage will show you a confirmation with the order details.
Most brokerages offer a market order, which buys the stock at whatever price it's trading at right now. They also offer a limit order, which lets you set a maximum price you're willing to pay — the order only executes if the stock drops to that price or lower. Limit orders can take days or weeks to fill, or may never fill at all.
Understand when your order executes
The stock market is open Monday through Friday, 9:30 a.m. to 4 p.m. Eastern time. If you place an order during market hours, it executes within seconds. If you place an order after 4 p.m. or on a weekend, it waits until the market opens the next trading day.
After your order executes, you own the shares. The brokerage holds them in your account and shows them in your portfolio. You can sell them anytime the market is open, or hold them for years. The brokerage sends you a statement each month showing what you own and what it's worth.
Know what fees you might pay
Most major brokerages charge zero commission on stock trades, meaning you don't pay a per-trade fee. However, some brokerages charge fees for other things: account inactivity, wire transfers, or closing your account early.
Some brokerages also charge a monthly account fee if your balance falls below a certain amount — often $500 to $2,500. Read the fee schedule on the brokerage's website before you open an account. The schedule lists every fee the brokerage charges and when it applies.
You will pay taxes on any profit you make when you sell a stock. If you hold the stock for more than one year before selling, the profit is taxed as a long-term capital gain, which usually has a lower tax rate than ordinary income. If you hold it for one year or less, it's taxed as a short-term capital gain at your ordinary income tax rate.
Decide between a regular account and a retirement account
A regular brokerage account (also called a taxable account) has no rules about when you can withdraw money or how much you can deposit. You pay taxes on any gains when you sell. This account is best if you think you'll need the money within a few years.
A retirement account like an IRA or 401(k) lets you buy stocks with tax advantages. In a traditional IRA, you may deduct your contributions from your taxes, and you don't pay taxes on gains until you withdraw the money in retirement. In a Roth IRA, you pay taxes now but withdraw the money tax-free later. The tradeoff is that you generally can't withdraw the money before age 59½ without a penalty.
Most brokerages let you open both types of accounts. You choose which account to use when you place an order. If you're saving for retirement and won't need the money for decades, a retirement account usually makes more sense. If you're saving for something sooner, use a regular account.
Start small and learn as you go
Your first stock purchase doesn't have to be large. Many brokerages let you buy fractional shares, so you can invest $50 or $100 if that's what fits your budget. Starting small lets you learn how the platform works and how the market moves without risking a lot of money.
After you buy your first stock, watch how its price changes day to day. Read the news about the company. Check your brokerage's research tools — most offer free articles, earnings reports, and analyst ratings. The more you learn before you buy, the more confident you'll feel about your decisions.
Frequently Asked Questions
Do I need a lot of money to start buying stocks?
No. Most brokerages have no account minimum, and fractional shares let you buy a portion of a stock for as little as $1 or $5. You can start with whatever amount you can afford and add more later.
What's the difference between a market order and a limit order?
A market order buys the stock at whatever price it's trading at right now — it executes almost instantly. A limit order sets a maximum price you're willing to pay and only executes if the stock drops to that price. Limit orders can take days to fill or may never fill at all.
Can I buy stocks on weekends?
You can place an order on weekends, but it won't execute until the market opens on Monday. The stock market is closed Saturday and Sunday, and also on certain holidays like Thanksgiving and Christmas.
What happens if the brokerage goes out of business?
Your stocks are protected. Brokerages are required to hold customer stocks separately from their own assets. If a brokerage fails, your stocks transfer to another brokerage. Cash in your account is insured up to $250,000 by the Securities Investor Protection Corporation (SIPC).
Should I buy individual stocks or a fund instead?
Individual stocks require more research and carry more risk — if one company performs poorly, your money suffers. Funds (like ETFs or mutual funds) spread your money across many companies, which reduces risk. Many beginners start with funds and add individual stocks as they learn more.