1.
First of all you need to deposit some funds in a brokerage account.
2.
You then ask your brokerage account for a quote of the stock you are interested in (you can do this online or over the phone), they then send a request of to the market maker.
3.
The market maker (firms that quote the buy an sell price of a stock) then issues you with a bid (sell) and ask (buy) price (the difference between their bid and ask price is where they make their money).
4.
You then send an order to the market, from your brokerage account, detailing what stock you want to buy, how many shares you want of that stock and what price you are willing to pay for the stock.
5.
If the price you set meets the quote the market maker has set then you will enter the trade!
Note: You will be charged a fee of around £8-12 UK and $2-8 US depending on what broker you use, this fee covers the purchase and sale of a share. Also, whether you buy 1, 100, or 100,000 shares, you will get charged the same fee. Brokers charge you by groups of stocks, not by how many.
The five steps make it sound slightly more difficult than it actually is and often, the process of buying a share, is very quick! Especially if you use market orders.
Why not practice buying shares buy registering for a free practice/virtual trading account at Wall Street Survivor.
