You need a brokerage account, money to invest, and a few minutes to place an order

Buying stock means purchasing a small ownership share in a company. To do it, you open an account with a brokerage — a firm licensed to buy and sell stocks on your behalf — deposit money, search for the company you want to own, and place an order. The whole process from account opening to your first purchase typically takes a few days, though the actual order itself takes seconds.

The main decision is which brokerage to use. Different brokerages charge different fees, offer different research tools, and have different minimum deposit amounts. Some charge per trade; others charge nothing. Some require $500 to start; others have no minimum. The brokerage holds your money and your stocks in an account registered to you, similar to how a bank holds your checking account.

Key Takeaways

  • You must open a brokerage account before you can buy stock, which involves providing your name, address, Social Security number, and employment information.
  • Different brokerages charge different fees and have different minimums, so comparing a few before you open an account saves money over time.
  • Once your account is funded, you search for a stock by company name or ticker symbol and place a buy order for a specific number of shares.
  • Your order executes during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), and you own the shares when ready after the trade settles, usually within two business days.

Opening a brokerage account

Start by choosing a brokerage. Common options include Fidelity, Charles Schwab, E*TRADE, TD Ameritrade, Robinhood, and Webull, though many others exist. Visit the brokerage's website and look for a button labeled "Open an Account" or "get your free guide." You will answer questions about your name, address, date of birth, Social Security number, employment status, and income. This information is required by federal law so the brokerage can verify your identity and report your account to tax authorities.

The brokerage will ask whether you want a standard taxable account or a retirement account like an IRA. For your first stock purchase, a standard taxable account is simpler — you can buy and sell whenever you want without restrictions. Retirement accounts have rules about when you can withdraw money, so they are better for money you plan to leave invested for years.

After you submit your information, the brokerage reviews it, which usually takes a few minutes to a few hours. Once approved, you can log in and see your account dashboard. At this point you have an account but no money in it yet.

Depositing money into your account

Before you can buy stock, you must transfer money from your bank into your brokerage account. Log into your brokerage account and look for a button labeled "Deposit," "Fund Account," or "Add Money." You will be asked to link a bank account — you provide your bank's routing number and your account number, which you can find on a check or in your bank's online portal.

Once your bank account is linked, you choose how much to deposit. The brokerage will show you any minimum deposit requirement. Some brokerages have no minimum; others require $500 or $1,000 to start. The money typically arrives within one to three business days, though some brokerages offer when ready deposits for smaller amounts.

While you wait for the deposit to clear, you can research stocks and create a watchlist — a personal list of companies you are interested in. Most brokerages let you add stocks to a watchlist without buying them, so you can track their price and read news about them.

Finding and researching a stock before you buy

Once your money is in your account, search for the stock you want to buy. Every publicly traded company has a ticker symbol — a short code, usually one to four letters. Apple's ticker is AAPL, Microsoft's is MSFT, and Amazon's is AMZN. You can search by company name or ticker symbol in your brokerage's search bar.

When you find the stock, the brokerage shows you the current price per share, the company's recent price history as a chart, and news about the company. Many brokerages also show analyst ratings, earnings reports, and financial statements. Read through this information to make sure you understand what the company does and why you want to own it.

Pay attention to the current price and think about how many shares you can afford. If a stock costs $100 per share and you have $1,000 to invest, you can buy 10 shares. If it costs $50 per share, you can buy 20 shares. Some brokerages let you buy fractional shares — meaning you can buy 0.5 shares or 2.3 shares instead of only whole numbers — which is useful if you want to invest a specific dollar amount rather than a specific number of shares.

Placing your first stock order

When you are ready to buy, click the "Buy" button next to the stock. Your brokerage will ask you how many shares you want to purchase. Enter the number and review the total cost — the number of shares times the current price, plus any fees your brokerage charges. Some brokerages charge nothing per trade; others charge $5 to $10.

Next, you choose the type of order. A market order buys the stock when ready at whatever the current price is. A limit order lets you set a maximum price you are willing to pay — if the stock price drops to that level or below, your order executes; if it never reaches that price, your order does not go through. For a first purchase, a market order is simpler and more straightforward.

Review your order one more time — the stock name, number of shares, order type, and total cost. Then click "Confirm" or "Place Order." Your order is now submitted to the market.

When your order executes and what happens next

If you place a market order during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays when the stock market is open), your order executes within seconds. You will see a confirmation message with an order number. If you place an order after market hours or on a weekend, it will execute the next time the market opens.

After your order executes, the trade must settle — meaning the stock must be transferred to your account and the money must be transferred from your account to the seller. Settlement typically takes two business days. During this time, you own the stock but may not be able to sell it when ready; your brokerage will tell you when it is settled and available to trade.

Once the trade settles, you can see the stock in your account holdings. Your brokerage shows you how many shares you own, the price you paid per share, the current price, and whether you are up or down in value. You can hold the stock as long as you want, sell it whenever you choose, or buy more shares of the same company.

Understanding fees and costs

Different brokerages charge different amounts. Some charge nothing per trade — you pay zero dollars to buy or sell a stock. Others charge $5 to $10 per trade. Some charge a percentage of the amount you invest. A few charge monthly account fees if your balance is below a certain amount.

Before you open an account, check the brokerage's fee schedule. Look for the cost per stock trade, any account minimums, and any monthly or annual fees. Over time, even small differences in fees add up. If you plan to buy stocks regularly, a brokerage with no per-trade fees will cost you less than one that charges $5 per trade.

You may also encounter bid-ask spreads — the difference between what buyers are willing to pay and what sellers are asking for. This is not a fee the brokerage charges; it is the natural cost of buying and selling. The spread is usually small for popular stocks but can be larger for less-traded companies.

Frequently Asked Questions

Can I buy stock with a small amount of money?

Yes. Many brokerages have no minimum deposit, and fractional shares let you invest any dollar amount. If you have $50 and a stock costs $200 per share, you can buy 0.25 shares. However, some brokerages do require a minimum deposit to open an account, so check before you sign up.

What happens if I place an order after the market closes?

Your order will wait until the market opens the next business day and execute at the opening price or shortly after, depending on market conditions. If you place an order on Friday after 4 p.m., it will not execute until Monday morning. You can place orders anytime, but they only execute during market hours.

Do I have to keep the stock forever?

No. You can sell your stock anytime the market is open. Log into your account, find the stock in your holdings, click "Sell," enter how many shares you want to sell, and place the order. The money from the sale will be deposited into your brokerage account within two business days, and you can then withdraw it to your bank or use it to buy other stocks.

What if I make a mistake when placing an order?

If your order has not executed yet, you can usually cancel it through your brokerage account. Look for a "Cancel Order" button next to the pending order. If the order has already executed, you cannot cancel it, but you can sell the stock when ready if you want to undo the purchase.

Do I owe taxes on my stock purchase?

You do not owe taxes when you buy stock. You owe taxes only when you sell it and make a profit. If you buy a stock for $100 and sell it for $120, you owe tax on the $20 gain. Your brokerage will send you a tax form at the end of the year showing all your gains and losses.