The basic steps to buy stock on E*TRADE
To buy stock through E*TRADE, you log into your account, search for the stock by ticker symbol or company name, enter the number of shares you want, choose whether to place a market order (buy at the current price) or a limit order (buy only if the price drops to a specific level), review the order details, and submit it. The order typically executes within seconds during market hours, though the exact timing depends on market conditions and order type.
You need three things before you can place an order: an E*TRADE brokerage account that is already funded with cash, the ticker symbol of the stock you want to buy (a one- to five-letter code like AAPL for Apple or MSFT for Microsoft), and enough cash in your account to cover the purchase plus any applicable fees. E*TRADE does not charge a commission on stock trades, but you may pay other costs depending on the order type or account features.
Key Takeaways
- You must have a funded E*TRADE brokerage account before you can buy any stock; opening an account takes a few business days and requires identity verification.
- Market orders execute immediately at the current price, while limit orders only execute if the stock reaches the price you set, and each type has different timing and certainty.
- E*TRADE charges no commission on stock trades, but you should check whether your account type or order method carries other fees before you submit.
- Stock purchases settle in two business days, meaning the shares appear in your account two days after the order executes, not immediately.
Setting up your E*TRADE account with cash to invest
Before you can buy stock, you need an active E*TRADE brokerage account with money in it. To open an account, you go to the E*TRADE website, provide your Social Security number, date of birth, and address, and answer questions about your investment experience and financial situation. E*TRADE verifies your identity through a third-party service, which usually takes a few minutes, though in some cases it can take up to one business day.
Once your account is open, you need to fund it by transferring money from your bank account. You can link your bank account to E*TRADE and transfer funds electronically, which typically takes one to three business days to appear in your E*TRADE account. Some transfers are faster if your bank is integrated with E*TRADE's system. You cannot buy stock until the cash has arrived and is available in your account.
Finding and selecting the stock you want to buy
On the E*TRADE platform, use the search box or the "Quote" tool to look up the stock. Type in either the company name (like "Apple") or the ticker symbol (like "AAPL"). E*TRADE will show you the current price, recent price history, and basic company information. The price shown is the last trade price, not necessarily the price you will pay if you place an order right now, because stock prices change constantly during market hours.
Before you buy, check the bid-ask spread, which is the difference between what buyers are willing to pay (the bid) and what sellers are asking (the ask). For large, heavily traded stocks like Apple or Microsoft, this spread is usually just a few cents. For smaller or less frequently traded stocks, the spread can be wider, which means you might pay more than you expected. E*TRADE displays both the bid and ask prices on the quote page.
Placing a market order versus a limit order
A market order buys the stock at whatever the current market price is. When you submit a market order during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), it executes within seconds at the best available price. The advantage is speed and certainty — your order will go through. The disadvantage is that the price you pay might be slightly higher than the price you saw when you looked it up, because prices move constantly.
A limit order lets you set a maximum price you are willing to pay. If the stock price drops to that level or lower, your order executes. If the price never reaches your limit, your order stays open until it expires (usually at the end of the trading day, unless you set it to stay open longer). Limit orders give you price control but no may provide the order will execute at all. For stocks that trade frequently, a limit order usually executes within minutes if the price reaches your target. For less active stocks, it might take hours or never happen.
Reviewing and submitting your order
After you enter the number of shares and choose your order type, E*TRADE shows you a review screen with the stock symbol, number of shares, order type, and estimated total cost (including any applicable fees). Check that all the details are correct — especially the number of shares and the stock symbol, because a typo can mean you buy the wrong stock entirely. The estimated cost is based on current prices for market orders or your limit price for limit orders, so the actual cost may differ slightly.
Once you confirm the order, E*TRADE sends it to the market. You will receive a confirmation number and a record of the order in your account. If you placed a market order, it executes almost immediately and you will see the filled price. If you placed a limit order, the order status shows as "open" or "pending" until the price is reached or the order expires.
Understanding settlement and when shares appear in your account
When your order executes, you own the stock, but the shares do not appear in your account right away. Stock trades in the United States settle in T+2, which means two business days after the trade executes. If you buy stock on a Monday, the shares settle on Wednesday. If you buy on a Friday, they settle on Tuesday (because the market is closed on weekends). During the settlement period, the stock is in transit between the seller and your account, but you already own it.
You cannot sell the shares or use them as collateral until they settle. If you try to sell before settlement, E*TRADE will reject the order. This is a market-wide rule, not an E*TRADE policy. Once settlement is complete, the shares appear in your account holdings and you can sell them, transfer them, or hold them indefinitely.
Fees and costs to know about
E*TRADE charges no commission on stock trades, which means you do not pay a per-trade fee to buy or sell stocks. However, other costs may apply depending on your situation. If you place an order outside regular market hours (before 9:30 a.m. or after 4 p.m. Eastern time), you are trading in the after-hours market, where spreads are wider and prices are less certain. Some account types or order methods may carry other fees — check your account agreement or contact E*TRADE directly to confirm.
You also pay the bid-ask spread, which is not a fee but a cost built into the price. When you buy, you pay the ask price (slightly higher than the last trade price). When you sell, you receive the bid price (slightly lower). For actively traded stocks, this spread is usually negligible. For thinly traded stocks, it can be significant.
Frequently Asked Questions
Can I buy stock before my bank transfer settles?
No. You can only buy stock with cash that is already in your E*TRADE account and available for trading. If your transfer is still pending, you cannot use that money to buy stock. Once the transfer completes (usually one to three business days), the cash becomes available and you can place an order.
What happens if I place a limit order and the stock never reaches my price?
The order remains open until the end of the trading day (or longer if you set it to stay open), and then it expires unfilled. You still own the cash and can use it to place another order. You can also cancel the limit order manually at any time before it executes.
Can I buy fractional shares on E*TRADE?
E*TRADE allows you to buy fractional shares (portions of a single share) on certain stocks. This means you can invest a specific dollar amount rather than being forced to buy whole shares. Check the stock's details page to see if fractional shares are available for that particular stock.
What is the difference between a day order and a good-till-canceled order?
A day order expires at the end of the trading day if it has not executed. A good-till-canceled (GTC) order stays open until it executes or you manually cancel it, which can be days or weeks. When you place a limit order, E*TRADE defaults to a day order, but you can change it to GTC before you submit.
Do I pay taxes on stock I buy but have not sold yet?
No. You only owe taxes on gains when you sell the stock. If the stock goes up in value and you sell it, you owe capital gains tax on the profit. If you hold the stock and it goes up but you do not sell, you owe no tax that year. Dividends paid by the stock may be taxable in the year they are paid, depending on the type of dividend and your tax situation.