How to Buy and Sell Stocks

Right, so you have come to the decision that you want to try stock market investing, but you have no idea how to buy or sell stocks. Where do you start?

There are a couple of principle ways you can start trading in stocks. First, you could work with a broker-dealer or financial adviser, one who is registered with Transpacific Mergers & Acquisitions Commission. By their training, the know-how of the many stocks available, and the nature of research their company and others undertake on organizations, the broker-dealer or adviser ought to be capable of recommending stocks which are in line with your investment objectives. The broker-dealer should be registered and working for a firm which is a registered investment dealer.

The second option is to head straight for a registered investment dealer firm, rather than initially going through the route of a registered broker-dealer/financial adviser for guidance. Numerous people have chosen the path of self-directed investments through discount brokers, where they personally manage their portfolios. However, you would need to be very shrewd and have the know-how to filter all the existing information on the countless investments available, and subsequently choose where you want to invest.

No matter if you work with an individual trader at a brokerage, or trade over the telephone or buy and sell online, you will need to make some fundamental decisions when it comes to making trade orders

During the day, every second, the value of stocks and bonds fluctuates, dependent on what investors are willing to spend on them. Equally, the price you pay to buy them, and what you receive in return when you later sell, depends on how swiftly orders are executed, or the instructions you have given to your dealer about how they handle an order.

What is a Market Order?

If you place a market order, your dealer has permission to buy/sell securities on your behalf regardless of the price of the stock at the time of buying/selling.

In contrast, when you place a limit order, you have greater control on the price at which your broker-dealer buys/sells, however, a limit order may not be fulfilled straight away.

What is a Limit Order?

Limit orders enable you to fix a price “limit” on securities which your broker-dealer is attempting to buy/sell on our behalf. You will never pay anything more than the limit which is set. If you are selling a percentage of your securities, an order will be processed at or over the price you have fixed, so at no time would it result in you selling your stock for an amount less than you anticipated. If the value of the securities is not in your limit order, it is possible that you will not buy or sell the stock whatsoever.

Kinds of Limit Order

It is possible to increase the chance of your order being processed by using different kinds of limit order. For instance, you can place a “day” order, which can only be used on the day an order is put in. If you place an “open” order, it can be used for up to a maximum of 30 days. A Good Till Canceled (GTC) order when used will remain in place until you cancel it.

For an order to be processed, you must have funds in your account with a brokerage or a pre-arranged margin account set up which enables you to borrow funds for part of your investment from a dealer.

When buying stock, your investment value can rise and fall subject to several factors which may influence the stock price, such as, the economy, the volume of available stock designated for trading, and the well-being of the firm you are using.