You need a brokerage account, money to invest, and a few minutes to place an order
Buying stocks means purchasing shares of a company through a brokerage firm — a licensed business that connects you to the stock market. You cannot buy stocks directly from a company or from the market itself. A brokerage holds your account, executes your trades, and keeps records of what you own.
The process has three parts: opening an account with a brokerage, funding that account with money, and placing an order to buy a specific stock. Most brokerages now let you do all three online in under an hour. You will need a Social Security number, a bank account or payment method, and a government-issued ID to verify who you are.
The actual purchase — clicking "buy" on a stock — takes seconds. What takes longer is deciding which brokerage to use and which stocks to buy. This guide covers how the buying process works, not which stocks are worth buying.
Key Takeaways
- You must open an account with a brokerage firm before you can buy any stock; you cannot purchase directly from a company or the stock market.
- Most brokerages charge no account opening fee and no minimum deposit, though some require a minimum balance to avoid monthly fees.
- You fund your account by linking a bank account or transferring money, and that cash sits in your account until you use it to buy stocks.
- When you place a buy order, you specify the stock ticker symbol, the number of shares, and the price you are willing to pay (or accept the current market price).
- 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.
Choose a brokerage and open an account
A brokerage is a company licensed to buy and sell stocks 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, deposit money, and place trades.
To open an account, you visit the brokerage's website and click the button to create a new account (usually labeled "Open an Account" or "get your free guide"). You will enter your name, address, Social Security number, date of birth, and employment information. The brokerage verifies your identity using this information — they are required by law to do this before you can trade.
Most brokerages ask what type of account you want. A standard brokerage account (sometimes called a taxable account) has no contribution limits and no restrictions on when you withdraw money. A retirement account like an IRA or 401(k) has tax advantages but limits on withdrawals before age 59½. If you are just starting out, a standard brokerage account is simpler.
Opening an account is free at most brokerages. Some charge a monthly fee if your account balance falls below a certain amount (often $500 to $2,500), but many have removed these minimums. Check the brokerage's fee schedule before you open the account.
Link your bank account and deposit money
After your account is open, you need to fund it. You do this by linking a bank account and transferring money from your bank to your brokerage account. The brokerage will ask for your bank's routing number and your account number — the same information you would give someone to send you a direct deposit.
The transfer usually takes three to five business days. During this time, the money is in transit and not yet available in your brokerage account. Once it arrives, it sits in a cash position in your account, ready to be used to buy stocks.
You can deposit as much or as little as you want. There is no legal minimum, though some brokerages set their own minimums (usually $0 to $500). You can also deposit money multiple times — you are not locked into a single deposit.
Some brokerages offer a feature called fractional shares, which means you can buy a partial share of a stock. This matters because some stocks cost hundreds of dollars per share. With fractional shares, you might spend $50 and own 0.5 shares of a $100 stock instead of having to buy a whole share. Not all brokerages offer this, so check before you open your account if this feature matters to you.
Place a buy order for the stock you want
Once your money is in your brokerage account, you can place a buy order. You log into your account, find the "Trade" or "Buy" section, and enter the details of what you want to buy.
You will need to provide:
- The stock ticker symbol — a one- to five-letter code that identifies the company (for example, AAPL for Apple, MSFT for Microsoft, TSLA for Tesla).
- The number of shares you want to buy (for example, 10 shares, or 0.5 shares if the brokerage offers fractional shares).
- The order type — usually either a market order or a limit order.
A market order means you buy at whatever the current price is right now. If you place a market order for Apple stock at 10 a.m., you pay the price Apple is trading at that moment. This order usually executes within seconds during market hours.
A limit order means you set a maximum price you are willing to pay. If you place a limit order to buy Apple at $150 per share, the order will only execute if the price drops to $150 or lower. If the price never reaches $150, your order never executes and you do not buy the stock. Limit orders can take days or weeks to execute, or may never execute at all.
Most new investors use market orders because they are simpler and execute when ready. Limit orders are useful if you want to buy a stock only at a specific price, but they carry the risk that you miss the opportunity entirely.
Understand when your order executes and when you own the stock
The stock market is open Monday through Friday, 9:30 a.m. to 4 p.m. Eastern time. If you place a buy order during these hours, it executes during the trading day. If you place an order outside these hours (before 9:30 a.m., after 4 p.m., or on weekends), it waits until the market opens the next trading day.
After your order executes, there is a settlement period. Settlement means the trade is finalized and the shares are officially transferred to your account. For stocks, settlement takes two business days. This means if you buy a stock on a Monday, you own it on Wednesday. During the settlement period, you own the stock but it may not show up in your account yet.
You cannot sell a stock until it has settled. You also cannot use the same cash to buy another stock until the first purchase settles. This is a rule set by the Securities and Exchange Commission (SEC), not by individual brokerages.
Once settlement is complete, the shares appear in your account and you can see them listed with the number of shares you own, the price you paid per share, and the current market value.
Know the costs of buying stocks
Most brokerages charge no commission to buy or sell stocks. This was not always true — 20 years ago, you paid $5 to $10 per trade — but major brokerages eliminated commissions around 2019.
However, there are other costs to be aware of. If you buy a stock and sell it within a short time, you may owe capital gains tax. If you buy stocks in a standard brokerage account and they increase in value, you owe tax on the gain when you sell. The tax rate depends on how long you held the stock and your income level.
Some brokerages charge fees for specific services: wire transfers, account transfers to another brokerage, or closing an account. These fees vary by brokerage and are usually $0 to $50. Check the fee schedule before you open an account.
If you use a margin account (borrowing money from the brokerage to buy stocks), you pay interest on the borrowed amount. Most new investors should use a standard cash account, not a margin account.
What happens after you buy: Holding and tracking your stocks
After your purchase settles, you own the stock. Your brokerage account shows your holdings — the stocks you own, how many shares, what you paid for them, and what they are worth today.
You can hold a stock for as long as you want. There is no time limit. Some investors hold stocks for decades. You can also sell a stock at any time during market hours by placing a sell order, the same way you placed a buy order.
Your brokerage sends you statements (usually monthly or quarterly) showing all your transactions and the current value of your account. You can also log in anytime to check your balance and see how your stocks are performing.
If a company you own stock in pays a dividend (a cash payment to shareholders), the dividend is deposited into your brokerage account automatically. You can then use that cash to buy more stocks or withdraw it to your bank account.
Frequently Asked Questions
Can I buy stocks with less than $100?
Yes. Most brokerages have no minimum deposit and no minimum purchase amount. If a stock costs $200 per share and you have $100, you can buy 0.5 shares (if the brokerage offers fractional shares). Some brokerages do not offer fractional shares, so check before you open an account if you plan to invest small amounts.
What is the difference between a market order and a limit order?
A market order buys at the current price when ready. A limit order sets a maximum price you are willing to pay and only executes if the stock drops to that price or lower. Market orders are simpler and execute right away; limit orders give you control over price but may never execute.
How long does it take to own the stock after I buy it?
Your order executes within seconds during market hours, but settlement takes two business days. You own the stock after settlement is complete, which is usually two days after you place the order. During the settlement period, you own it but cannot sell it yet.
Do I have to pay taxes when I buy stocks?
No. You pay taxes only when you sell a stock and realize a gain (or loss). If you buy a stock for $100 and it grows to $150, you owe tax on the $50 gain only when you sell. Until then, there is no tax owed.
Can I buy stocks outside of market hours?
You can place an order outside market hours (before 9:30 a.m., after 4 p.m., or on weekends), but it will not execute until the market opens. Some brokerages offer extended-hours trading (before 9:30 a.m. or after 4 p.m.), but this is more complex and not recommended for new investors.