How to sell stocks

To sell stocks, you log into your brokerage account, find the stock you own, enter the number of shares you want to sell, choose a price type (market order or limit order), and confirm the sale. The cash from the sale lands in your brokerage account within one to three business days, depending on settlement time. You can then withdraw that cash to your bank account or use it to buy other investments.

The actual mechanics take minutes. The harder part is deciding whether to sell at all — and if you do, whether to sell all your shares or some of them. This guide walks you through both the technical steps and the thinking that should come before them.

Key Takeaways

  • A market order sells your shares at the current price immediately, while a limit order waits for the price to reach a level you set.
  • You owe capital gains tax on the profit when you sell, and the tax rate depends on how long you held the stock.
  • Most brokerages settle sales within one to three business days, so the cash is not instantly available.
  • Selling during market hours (9:30 a.m. to 4 p.m. Eastern) usually gives you better prices and faster execution than after-hours sales.

Market orders versus limit orders

A market order sells your shares at whatever price the market is offering right now. If you own 100 shares of a stock trading at $50, a market order executes almost instantly at or very close to $50 per share. You get certainty about timing but not about price — the actual sale price can be a few cents higher or lower than what you saw on your screen, especially for stocks that trade less frequently.

A limit order lets you set a minimum price. You tell your broker "sell my 100 shares only if the price hits $52 or higher." The order sits in the market until either the stock reaches $52 (and your shares sell) or you cancel it. Limit orders give you control over price but no may provide the sale will happen. If the stock never reaches your target price, you still own the shares.

Most people use market orders when they want to sell now. Limit orders make sense if you are willing to wait and want to avoid selling at a price you think is too low. During volatile trading, limit orders can protect you from selling at a temporary dip.

The step-by-step selling process

Log into your brokerage account — the same platform where you bought the stock. This might be a bank's website, a dedicated brokerage like Fidelity or Charles Schwab, or an app like Robinhood or E-Trade.

Find the stock in your portfolio or holdings section. Click on it to open the details. Look for a "Sell" button or link. Some platforms call it "Sell," others say "Trade" or "Place Order." Click it.

Enter the number of shares you want to sell. If you own 100 shares and want to sell all of them, type 100. If you want to sell only 30, type 30. The platform will show you the current market price and an estimate of how much cash you will receive (before fees and taxes).

Choose your order type: market or limit. For a market order, you are done with this step. For a limit order, enter the price at which you want to sell.

Review the order summary. Check the number of shares, the price, and any fees your broker charges. Then click "Confirm" or "Submit." The order goes to the market.

When the sale settles and when you can use the cash

Your sale does not complete instantly. The stock market operates on a T+1 settlement cycle, which means trades settle one business day after you place them. If you sell on a Monday, the settlement happens on Tuesday. If you sell on a Friday, settlement is Monday (assuming the market is open).

During that one-day window, the sale is confirmed but the cash is not yet in your account. Some brokerages let you use unsettled cash to buy other stocks immediately, but you cannot withdraw it to your bank account until it settles. After settlement, the cash sits in your brokerage account as a cash balance, and you can withdraw it whenever you want — though your bank may take an additional one to three business days to process the transfer.

Weekends and market holidays extend settlement time. If you sell on a Friday and Monday is a holiday, settlement does not happen until Tuesday.

Capital gains tax and what you owe

When you sell a stock for more than you paid for it, you owe tax on the profit — called a capital gain. The amount of tax depends on how long you held the stock.

Short-term capital gains apply if you held the stock for one year or less. These are taxed as ordinary income, at your regular income tax rate, which can be 10 percent to 37 percent depending on your income level.

Long-term capital gains apply if you held the stock for more than one year. These are taxed at lower rates: 0 percent, 15 percent, or 20 percent, depending on your total income. Most people pay 15 percent.

Your brokerage will send you a tax form (Form 1099-B) after the year ends, showing all your sales and the gains or losses. You report this on your tax return. If you sold at a loss, you can use that loss to offset other gains or, in some cases, to reduce your ordinary income.

Keep records of what you paid for the stock (your cost basis) and when you bought it. Your brokerage tracks this, but having your own records makes tax time easier.

Selling during market hours versus after-hours

The stock market is officially open from 9:30 a.m. to 4 p.m. Eastern time, Monday through Friday. During these hours, trading volume is highest, prices are most stable, and your order executes quickly at a predictable price.

You can place sell orders after hours (4 p.m. to 8 p.m. Eastern) or before hours (4 a.m. to 9:30 a.m. Eastern), but execution is slower and prices can be much wider. A stock might trade at $50 during the day but $49.50 to $50.50 after hours, with fewer buyers and sellers in the market. For most people, selling during regular market hours is the better choice.

Partial sales and tax strategy

You do not have to sell all your shares at once. If you own 200 shares, you can sell 50 now and hold the other 150. This is useful if you want to lock in some gains while keeping exposure to the stock, or if you want to spread your sales across different tax years to manage your tax bill.

If you bought shares at different times and different prices, you can choose which shares to sell. Some brokerages let you specify "sell the shares I bought most recently" or "sell the shares I bought earliest." This matters for taxes: selling your oldest shares (if they have the biggest gains) might trigger more tax, while selling your newest shares (if they have smaller gains) might trigger less. Talk to your broker about which method they use by default, and ask if you can choose.

Common mistakes to avoid

Selling during a panic or a temporary dip is one of the most expensive mistakes. Stock prices move up and down constantly. Selling because the price dropped 10 percent often means you lock in a loss right before the stock recovers. Unless your financial situation has changed or your investment plan has changed, short-term price swings are not a reason to sell.

Forgetting about taxes is another trap. If you sell a stock you have held for six months at a big profit, you will owe short-term capital gains tax at your full income tax rate. That can be 30 to 40 percent of your gain, depending on your income. Plan for that tax bill before you sell, or you might not have enough cash left over.

Placing a limit order and then forgetting about it is also common. Your order sits in the market for weeks or months, and you forget it is there. If the stock suddenly drops and hits your limit price, your shares sell at a price that made sense weeks ago but not today. Check your open orders regularly.

Frequently Asked Questions

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

You miss out on that gain, but you also avoid the risk of it going down. Selling is a decision, not a prediction. Once you sell, the stock is no longer yours, so its future price does not affect you. Regretting a sale after the fact is normal but not a reason to change your strategy next time.

Can I sell a stock I bought on margin or with borrowed money?

Yes, you can sell it the same way you sell any other stock. However, your broker may have rules about when you can sell borrowed shares, and selling does not automatically pay back the loan. The cash from the sale goes into your account, and you still owe interest on the borrowed amount until you pay it back. Check your margin agreement with your broker.

Do I have to pay a fee to sell?

Most major brokerages do not charge a commission to sell stocks anymore. However, some brokerages charge a small fee, and some charge fees only for certain types of orders or stocks. Check your broker's fee schedule before you sell, especially if you are selling a large number of shares or an unusual stock.

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

You can place an order after hours or before hours, but it will not execute until the market opens. If you place a market order at 6 p.m., it will execute at the opening price the next morning, which might be very different from the price you saw at 4 p.m. Use a limit order if you want to control the price, or wait until regular market hours to place a market order.

How do I know if my sale actually went through?

Check your account immediately after placing the order. Your brokerage will show the order status — "pending," "filled," or "cancelled." Once it shows "filled," the sale is confirmed. You will also receive a confirmation email or notification. The shares will disappear from your holdings, and the cash will appear in your account after settlement (one business day later).