How to Sell Stocks You Own

The basic steps to sell a stock

To sell a stock, you log into your brokerage account, find the stock you own, enter the number of shares you want to sell, choose a price type (usually "market order" to sell immediately at the current price), and confirm the sale. The cash from the sale lands in your brokerage account within two business days, and you can then withdraw it to your bank account or use it to buy other investments.

The entire process takes minutes once you have an account open. Most brokerages — Fidelity, Charles Schwab, E*TRADE, Vanguard, and others — have nearly identical selling flows. The main decision you make is whether to sell at the market price right now or set a specific price you want to receive.

Key Takeaways

• Market orders sell your shares immediately at whatever price the stock is trading for right now, while limit orders let you set a minimum price you will accept.
• The cash from your sale settles in your brokerage account after two business days, but you can place new trades with it immediately.
• Selling triggers a taxable event: you owe capital gains tax on the profit (or can deduct the loss) when you file your tax return.
• Long-term capital gains (stocks held over one year) are taxed at lower rates than short-term gains, so timing your sale can affect your tax bill.
• Some brokerages charge commissions or fees for selling, though most major brokerages have eliminated per-trade commissions.

Market orders versus limit orders

A market order sells your shares at the best available price the moment you submit it. If a stock is trading at $50, your market order will likely fill at or very close to $50. This is the fastest and most reliable way to sell, and it is what most people use when they simply want out of a position.

A limit order lets you name the lowest price you will accept. If you own a stock trading at $50 and you set a limit order at $52, your shares will only sell if the price reaches $52 or higher. The advantage is you control the price; the disadvantage is your order might never fill if the stock never reaches your target. Limit orders are useful when you are willing to wait or when you want to avoid selling during a temporary dip.

Most brokerages let you set how long a limit order stays active — typically one day, until the end of the week, or until you cancel it. If the stock never hits your price within that window, the order expires and your shares remain unsold.

Understanding capital gains tax

When you sell a stock for more than you paid for it, you owe tax on the profit — called a capital gain. When you sell for less than you paid, you have a capital loss, which you can use to offset other gains or reduce your taxable income. Your brokerage will send you a tax form (Form 1099-B) after the year ends, and you report the gain or loss on your tax return.

The tax rate depends on how long you held the stock. If you held it for one year or less, it is a short-term capital gain, taxed at your ordinary income tax rate — the same rate as your salary or wages. If you held it for more than one year, it is a long-term capital gain, taxed at a lower rate (0%, 15%, or 20%, depending on your income). This is why many investors hold stocks for over a year before selling: the tax savings can be significant.

If you sell at a loss, you can deduct up to $3,000 of losses against other income in a single year. Any losses beyond that carry forward to future years. This is called tax-loss harvesting, and some investors deliberately sell losing positions to offset gains elsewhere in their portfolio.

Timing your sale and avoiding mistakes

Before you sell, think about whether you are selling because your investment thesis has changed (the company's fundamentals shifted, or you no longer believe in it) or because the stock has risen and you want to lock in gains. Both are valid reasons, but they lead to different decisions. Selling a winner to rebalance your portfolio is different from panic-selling during a market drop.

One common mistake is selling during market downturns out of fear. Stock prices fluctuate daily; a temporary drop is not a reason to sell unless your reason for owning the stock has actually changed. Another mistake is holding a losing stock too long, hoping to break even. If the company's prospects have genuinely deteriorated, waiting rarely helps.

If you own the stock in a tax-advantaged account like a 401(k) or IRA, you do not owe capital gains tax when you sell — the tax is deferred (in a traditional account) or never owed (in a Roth account). This means you can buy and sell within these accounts without worrying about triggering a tax bill each time.

What happens after you sell

The cash from your sale appears in your brokerage account as settled cash after two business days. During those two days, the trade is still settling — the shares are being transferred out of your name and the cash is being transferred in. You can place new trades with the cash immediately, even before it fully settles, though some brokerages may restrict certain types of trades during the settlement period.

Once the cash is in your account, you can leave it there, buy other stocks or funds, or withdraw it to your bank account. Withdrawals typically take three to five business days to appear in your bank, depending on your bank and brokerage.

If you sell only part of your position — say, you own 100 shares and sell 40 — you still own 60 shares. Your brokerage tracks this automatically. If you bought those shares at different times or prices, your brokerage will ask you which shares you want to sell (specific identification) or will use a default method like first-in-first-out (FIFO). This matters for taxes, because selling your oldest shares (FIFO) might trigger a different capital gain than selling your newest shares.

Fees and commissions

Most major brokerages — Fidelity, Charles Schwab, E*TRADE, Vanguard, and TD Ameritrade — charge no commission to buy or sell stocks. This was not always the case; until around 2019, most brokerages charged $5 to $10 per trade. If you use a smaller or specialized brokerage, check their fee schedule before you sell, because some still charge per-trade commissions.

Some brokerages charge other fees that can affect your sale: account inactivity fees (rare now), wire transfer fees if you withdraw cash, or margin interest if you borrowed money to buy the stock. Read your brokerage's fee schedule or ask their customer service before you open an account.

If you own fractional shares (less than one full share), most brokerages now let you sell those too, though a few still require you to own at least one full share to place a sell order. Check your brokerage's rules if you own fractional shares.

Selling stocks in different account types

In a regular taxable brokerage account, you owe capital gains tax when you sell. In a 401(k) or traditional IRA, you do not owe tax when you sell — the tax comes later when you withdraw the money in retirement. In a Roth IRA, you do not owe tax on the sale or the withdrawal (as long as you follow the rules). In a 529 college savings plan, you do not owe tax on gains if you use the money for education.

The selling process is identical across all account types — you log in, select the stock, enter the number of shares, and confirm. The difference is only in the tax treatment. If you are not sure which account type you have, log into your brokerage and look for account statements or account details; they will say "Taxable", "Traditional IRA", "Roth IRA", or the specific plan name.

Frequently Asked Questions

Can I sell a stock immediately after I buy it?

Yes. There is no holding period required. You can buy a stock and sell it the same day if you want. However, if you do this frequently (more than four times in five business days), your brokerage may flag you as a pattern day trader and impose restrictions on your account. This rule applies mainly to accounts with less than $25,000.

What if I sell a stock and the price goes up the next day?

That is normal and happens to every investor. You cannot predict short-term price movements, and second-guessing a sale is usually a mistake. If you sold because your investment thesis changed, that was the right call regardless of what happens next. If you sold just to lock in gains, accept that you cannot time the market perfectly.

Do I have to sell all my shares at once?

No. You can sell any number of shares you own, from one share to all of them. Many investors sell gradually — a few shares at a time — to spread out their sales and reduce the impact of selling everything at once. This is called dollar-cost averaging in reverse.

What if I want to sell but the market is closed?

You can place an order after hours or before the market opens, but it will not execute until the market opens the next trading day. Most brokerages accept after-hours orders, though the price you receive might be different from what you see on your screen, because prices move in after-hours trading too.

How do I know what price my stock will sell for?

With a market order, you will get the best available price at the moment your order executes, which is usually within a few cents of the price you see on your screen. With a limit order, you set the price yourself. The actual price depends on what other buyers and sellers are willing to pay at that exact moment.