The Basic Steps to Buy a Stock

To buy stocks online, you need a brokerage account, money in that account, and the ticker symbol of the stock you want to buy. You log into your brokerage app or website, search for the stock by name or ticker, enter how many shares you want, review the price, and confirm the purchase. The whole process takes a few minutes once your account is set up and funded.

The stock appears in your account when ready, though the transaction settles in two business days — meaning the money leaves your account and the shares are fully yours after that settlement period. Until then, you own the shares but the brokerage is still processing the paperwork with the stock exchange.

Key Takeaways

  • You must open a brokerage account with a company like Fidelity, Charles Schwab, E*TRADE, or Robinhood before you can buy any stock.
  • The account needs cash in it — either transferred from your bank or deposited by check — before you place your first order.
  • You search for a stock by its ticker symbol (like AAPL for Apple or MSFT for Microsoft) and decide how many shares to buy at the current market price.
  • Your purchase settles in two business days, meaning the transaction is final and the shares are fully yours after that time.
  • Most brokerages charge no commission to buy stocks, but the price you pay per share changes throughout the trading day.

Opening a Brokerage Account

A brokerage account is your gateway to buying stocks. It is not the same as a bank account — it is a separate account held at a brokerage firm, which is a company licensed to buy and sell securities on your behalf. Common brokerages include Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Robinhood, and Webull. Each one has a website and a mobile app where you can open an account in 10 to 15 minutes.

To open an account, you will need your Social Security number, a valid ID, your address, and your employment information. The brokerage will ask you a few questions about your investment experience and financial situation — these are required by law, not a judgment about whether you should invest. You do not need a minimum amount of money to open most accounts, though some brokerages have a minimum deposit to start trading (often $0 to $500, depending on the firm).

After you submit your information, the brokerage verifies your identity, which usually takes a few minutes to a few hours. Once your account is approved, you can fund it and start buying stocks.

Funding Your Brokerage Account

Before you can buy a stock, you need money in your brokerage account. You do this by linking your bank account and transferring cash to the brokerage. Most brokerages let you link your checking or savings account directly through their app or website — you enter your bank's routing number and your account number, and the brokerage verifies the connection by depositing two small amounts (usually under $1 each) into your bank account, which you then confirm in the brokerage app.

Once your bank account is linked, you can transfer money whenever you want. A transfer typically takes one to three business days to show up in your brokerage account. Some brokerages also accept checks mailed to their address, though this is slower. A few brokerages offer wire transfers for faster funding, but wire transfers usually cost $10 to $25.

The money sits in your brokerage account as cash until you use it to buy stocks. You can withdraw it back to your bank account at any time, though withdrawals also take a few business days to process.

Finding and Buying a Specific Stock

Once your account is funded, you are ready to buy. Log into your brokerage app or website and look for a "Buy" button or a search box. Type in the stock's ticker symbol — a one- to five-letter code that identifies the company. Apple's ticker is AAPL, Microsoft is MSFT, Amazon is AMZN, and Tesla is TSLA. If you do not know the ticker, you can search by the company name and the brokerage will show you the ticker.

When you click on the stock, you will see its current price per share, which updates throughout the trading day (9:30 a.m. to 4 p.m. Eastern time on weekdays). You will also see a chart showing the stock's price history, news about the company, and other information. Enter the number of shares you want to buy — for example, if the stock costs $150 per share and you want to spend $1,500, you would enter 10 shares.

The brokerage will show you the total cost (number of shares times the price per share) before you confirm. Review this number, then click "Buy" or "Confirm" to place your order. Your order is sent to the stock exchange, and the transaction is complete within seconds.

Market Orders vs. Limit Orders

When you place an order to buy a stock, you choose between two main types: a market order and a limit order. A market order buys the stock at whatever the current price is right now. This is the simplest and fastest way to buy — your order fills almost when ready at the best available price. Most beginners use market orders.

A limit order lets you set a maximum price you are willing to pay. For example, if a stock is currently $100 per share but you only want to buy it if it drops to $95, you set a limit order at $95. The order waits until the stock reaches that price (or lower), then buys automatically. If the stock never reaches your limit price, your order never fills and you do not buy any shares. Limit orders are useful if you want to wait for a better price, but they carry the risk that you miss out on the stock entirely.

Most brokerages default to market orders because they are simpler. If you want to use a limit order, look for an "Order Type" dropdown menu when you are placing your order.

Understanding Settlement and When You Own the Stock

After you buy a stock, the transaction does not settle when ready. Settlement is the process where the brokerage transfers the shares to your account and the money leaves your account. This takes two business days — so if you buy a stock on a Monday, it settles on Wednesday. If you buy on a Friday, it settles on Tuesday (because the market is closed on weekends).

During those two days, you own the shares and can see them in your account, but the transaction is still processing. You cannot sell the shares until settlement is complete, and the money is still technically in your account (though reserved for the purchase). This two-day settlement rule is set by the Securities and Exchange Commission (SEC) and applies to all stock purchases in the United States.

Once settlement is complete, the shares are fully yours and you can sell them whenever you want during market hours. You will also start receiving any dividends the company pays, if it pays them.

Costs and Commissions

Most major brokerages charge no commission to buy or sell stocks — meaning you do not pay a fee to the brokerage for the transaction itself. This is a major change from 20 years ago, when brokerages charged $5 to $10 per trade. Today, zero-commission trading is standard at Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Robinhood, and Webull.

However, there are other costs to be aware of. The bid-ask spread is the difference between what buyers are willing to pay and what sellers are asking — this is a tiny cost built into every stock price, and it goes to the market maker, not your brokerage. For popular stocks, this spread is usually just a few cents per share. For less popular stocks, it can be larger.

Some brokerages charge fees for other services — for example, a fee to transfer your account to another brokerage, or a fee if your account balance falls below a certain amount. Read the brokerage's fee schedule before you open an account to understand what you might owe.

Frequently Asked Questions

Can I buy stocks during after-hours trading?

Most brokerages let you place orders outside regular market hours (9:30 a.m. to 4 p.m. Eastern), but these orders do not fill until the market opens the next day. After-hours trading is available to some account types, but prices are less stable and spreads are wider, so it is riskier for beginners. Stick to regular market hours for your first purchases.

What is the minimum amount of money I need to start buying stocks?

Many brokerages let you open an account with $0 and buy fractional shares (portions of a stock) for as little as $1. Some brokerages have a minimum deposit to start trading, usually $100 to $500. Check your chosen brokerage's website for its specific minimum.

Can I buy stocks on weekends?

The stock market is closed on weekends and holidays, so you cannot buy stocks then. You can place orders through your brokerage app on weekends, but they will not fill until the market opens on Monday morning at 9:30 a.m. Eastern.

What happens if I change my mind after I place an order?

If your order has not filled yet, you can cancel it through your brokerage app — look for a "Cancel Order" button next to your pending order. Once the order fills (which happens within seconds for market orders), you own the shares and cannot cancel. You can only sell them.

Do I have to pay taxes on stocks I buy?

You do not pay taxes when you buy stocks. You pay taxes on the profit when you sell — if you bought at $100 and sold at $150, you owe taxes on the $50 gain. You also owe taxes on dividends the company pays. Your brokerage will send you a tax form (Form 1099) at the end of the year showing your gains and dividends.