You need a brokerage account, money to invest, and about 15 minutes to place your first order

Buying stocks online means opening an account with a brokerage firm, depositing money, and using their website or app to purchase shares. The process is straightforward: you choose a brokerage, complete their account setup (which includes identity verification), fund the account, search for the stock you want by its ticker symbol, decide how many shares to buy, and submit the order. Most brokerages execute the order within seconds during market hours.

The main decision is which brokerage to use. Different firms charge different fees, offer different research tools, and have different minimum deposit requirements. Some brokerages charge per trade; others charge nothing. Some require $500 to $1,000 to open an account; others have no minimum. The brokerage you choose affects how much of your money actually goes into stocks versus fees, so comparing a few options before you start makes sense.

Key Takeaways

  • You must open a brokerage account with a real firm — you cannot buy stocks directly from a company or through a bank without going through a broker.
  • Most online brokerages now charge zero commission per trade, but some still charge fees for certain order types or services, so read the fee schedule before you deposit money.
  • Your brokerage will ask for your Social Security number, address, and employment information during account setup, and they will verify your identity before you can trade.
  • Stocks trade during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), and orders placed outside those hours execute the next trading day at the market open price.
  • You can start with as little as one share of most stocks, so you do not need thousands of dollars to begin investing.

Choosing a brokerage that fits your needs and budget

A brokerage is a licensed firm that holds your money and executes your buy and sell orders. Major brokerages include Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Robinhood, Webull, and Interactive Brokers. Each one operates a website and mobile app where you can research stocks and place orders.

Compare brokerages on three things: commission fees, account minimums, and research tools. Commission fees are what the brokerage charges you per trade — many now charge zero, but some charge $5 to $10 per order. Account minimums range from zero to $2,500; if you have less than the minimum, you cannot open an account there. Research tools matter if you plan to read company reports and charts before buying; some brokerages offer free tools, others charge for premium versions.

Read the fee schedule on the brokerage's website before you open an account. Look for hidden fees on things like wire transfers, account inactivity, or margin accounts (borrowing money to buy stocks). A brokerage with zero commission and no account minimum is usually the right choice for a first-time buyer with a small amount of money.

Opening an account and verifying your identity

Once you choose a brokerage, go to their website and click the button to open a new account. You will enter your name, address, date of birth, Social Security number, and employment information. The brokerage uses this to verify your identity and comply with federal law.

The verification process usually takes a few minutes to a few hours. The brokerage checks your information against public records and may ask you security questions (like "What was the name of your first pet?") to confirm you are who you say you are. Some brokerages verify instantly; others take up to one business day.

Once your account is verified, you can deposit money. Most brokerages let you link a bank account and transfer funds electronically. The transfer usually takes one to three business days. Some brokerages also accept wire transfers, which are faster but may carry a fee. Do not deposit more than you can afford to lose — stock prices go down as well as up.

Finding and researching a stock before you buy

Every stock has a ticker symbol: a one- to five-letter code that identifies it. Apple is AAPL, Microsoft is MSFT, Amazon is AMZN. You search for stocks by ticker symbol in your brokerage's search bar.

Before you buy, spend time reading about the company. Look at the company's website, read recent news articles, and check the financial statements your brokerage provides. Pay attention to the company's revenue (money coming in), profit (money left after expenses), and debt (money it owes). A company with growing revenue and manageable debt is generally safer than one losing money or drowning in debt.

Your brokerage's research section usually includes a stock quote (the current price), a chart showing the price over time, key financial numbers, and analyst opinions. Use these to understand whether the stock price seems reasonable compared to the company's earnings. Do not buy based on a tip from a friend or a post on social media — do your own research first.

Placing your first order and understanding order types

Once you have decided to buy, log into your brokerage account and search for the stock by ticker symbol. Click on it, and you will see a button to buy or place an order. The brokerage will ask you three things: how many shares you want, what type of order you want to place, and whether you want any special conditions.

A market order buys the stock at whatever price it is trading at right now. If you place a market order for Apple during market hours, you will own the shares within seconds at the current market price. Market orders are fast and almost always execute, but you do not know the exact price until the order is done.

A limit order lets you set a maximum price you are willing to pay. If you place a limit order to buy Apple at $150 per share and the stock is currently $155, your order waits. If the price drops to $150 or below, the order executes automatically. If the price never drops that low, your order never fills and you own no shares. Limit orders give you control over price but no may provide the order will execute.

For a first-time buyer, a market order during market hours is usually the simplest choice. You will own the stock within seconds and know exactly how many shares you have.

What happens after you buy and how to track your investment

Once your order executes, you own the shares. Your brokerage account will show your holdings (the stocks you own), the number of shares, the price you paid per share, and the current value of your position. If the stock price goes up, the value of your position goes up. If it goes down, the value goes down.

Your brokerage sends you a confirmation email with the details of your trade: the stock symbol, number of shares, price per share, total cost, and the date and time of the trade. Keep this email for your records. If you ever sell the stock, you will need to know what you paid for it to calculate your gain or loss for taxes.

Check your account regularly, but do not obsess over daily price changes. Stock prices move every day based on news, earnings reports, and overall market conditions. If you bought the stock because you believe in the company long-term, short-term price swings should not panic you into selling. Many new investors buy and then sell too quickly when the price drops, locking in losses they could have recovered from if they had waited.

Common mistakes to avoid when buying stocks online

Do not invest money you need for rent, food, or emergencies. Stocks are not savings accounts — the money you put in can go down in value, and you may need to wait weeks or months to recover losses. Only invest money you can afford to leave in the market for at least a few years.

Do not buy a stock because someone on social media says it is going to skyrocket. These posts are often wrong, and sometimes they are deliberate scams designed to pump up the price so the poster can sell at a profit. Do your own research using the company's financial statements and reputable news sources.

Do not put all your money into one stock. If that company has bad news, your entire investment takes a hit. Spreading your money across multiple stocks (or using a fund that holds many stocks) reduces risk. Many new investors start by buying shares in a low-cost index fund, which holds hundreds of stocks in one purchase.

Do not try to time the market by waiting for the "perfect" price. Most research shows that buying regularly over time, regardless of price, builds wealth better than trying to guess when to buy and sell. If you have money to invest, start now rather than waiting for a price drop that may never come.

Frequently Asked Questions

How much money do I need to start buying stocks?

Most brokerages have no account minimum, so you can open an account with $1 or $100. Since you can buy fractional shares (parts of a share) at most brokerages, you can invest any amount. However, having at least $500 to $1,000 lets you buy several different stocks and spread your risk.

Do I pay taxes on stocks I own but have not sold?

No. You only owe taxes when you sell a stock and make a profit. If you buy a stock for $100 and it rises to $150, you owe no tax until you sell. When you do sell, you owe tax on the $50 gain. Your brokerage sends you a tax form each year showing your gains and losses.

What is the difference between a stock and a mutual fund?

A stock is a share of ownership in one company. A mutual fund is a basket of many stocks (or bonds) managed by a professional. When you buy a mutual fund, your money is spread across dozens or hundreds of holdings, which reduces risk. Stocks offer more control but more risk; funds offer less control but more stability.

Can I buy stocks outside of market hours?

You can place an order outside market hours (before 9:30 a.m. or after 4 p.m. Eastern time), but it will not execute until the market opens the next trading day. Some brokerages offer extended-hours trading, but prices are less stable and spreads (the difference between buy and sell prices) are wider, so it is riskier for new investors.

What if I change my mind after placing an order?

If your order has not executed yet, you can usually cancel it through your brokerage account. Once the order executes and you own the shares, you can only get rid of them by selling. There is no "undo" button after the trade is complete.