The Procedure for Buying & Selling Stocks
- You need to have a brokerage account in place before you can buy and sell stocks. If you are comfortable making your own trading decisions and transacting over the Internet, you can save a lot of money on commissions by choosing an online discount broker. Many online discount brokers allow customers to buy and sell stocks for less than $10 per trade.
- Before you can buy or sell a stock, you need to know the ticker symbol it trades under. Every stock has its own unique ticker symbol, and you can find that information at online financial websites, and in financial publications like the "Wall Street Journal" and "Barrons." Different companies often have similar ticker symbols, so be sure to double-check your entry when placing your trade.
- Once you have the ticker symbols for the stocks and know how many shares you want to buy or sell, log on to your brokerage account and go to the trading menu. Enter a buy or sell order as applicable and type the ticker symbol of the stock and the number of shares you want to transact. If you want to buy or sell only if the stock reaches a certain price, you can enter the order as a limit order. If you simply want the current market price, enter the order as a market order.
- Taxes can be an important consideration when buying and selling stocks. When you buy a stock, you should always print a copy of the trade confirmation and keep it in a safe place. You need to know how much you paid for the stock to calculate your gain or loss when you sell. Before you sell a stock, you should determine your cost, and use that information to calculate how much you will owe in taxes. If you held the stock for less than a year, the capital gain is taxed at your ordinary income tax rate. If you held the stock for a year or longer, that gain is taxed at a maximum rate of 15 percent for 2011.