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How to buy shares

With all of the different products and trading terms used by investors, finding out how to buy shares can be a bewildering process. Here’s a guide to trading stocks and shares.

What are stocks and shares?

Stocks and shares are terms for the units of ownership in a company. The sum of all the shares in a company make up its total value on the market, known as its market capitalisation.

As a company’s market value goes up and down, so does the price of its shares. Investors buy and sell those shares in the hope of making a profit, which is known as share trading.

Not every company has shares that can be bought and sold. For a company to be traded, it has to list on a stock exchange in a process called an initial public offering (or IPO).

How the stock market works

The stock market is a general term for the global network of stock exchanges where shares are traded. Most public companies list on their local exchange: so Australian companies are usually listed on the Australian Stock Exchange (ASX), while US companies are usually listed on either the New York Stock Exchange (NYSE) or the NASDAQ.

Stock exchanges have strict regulations for both the companies that list on them and the dealers who are allowed to trade directly with them. For that reason, most individual investors will buy and sell their shares via a stockbroker.

It’s worth noting that different exchanges have different set trading hours. For example, stocks on the ASX can be bought and sold normally from 10.00 until 16.00 AEST, while stocks on the NYSE or NASDAQ can be traded from 09.30 until 16.00 EST (23.30 to 06.00 AEST).

Stockbrokers

When an individual investor wants to buy or sell some shares, they will typically place an order with their broker containing instructions on how much to trade and what price to pay. The broker will then relay those instructions to a dealer on the relevant exchange, who will carry them out.

As well as specialist stockbrokers, many investment firms and high-street banks will offer a stockbroking service.

There are three main types of stockbroker:

  • Full service brokers develop a strategy and place trades on behalf of their client without their input
  • Advisory brokers recommend trades but will trade only when their client tells them to 
  • Execution-only brokers will not offer advice and will place trades only when their client tells them to 

At IG, we offer an execution-only share trading service, allowing you to place trades via our online platform or over the phone.

Buying shares

Once you’ve decided to trade shares with IG, follow these three steps:

1. Open an account

Open a share trading account with us

 

2. Select the shares you want to buy

Our shares insight and analysis can help you get started.

3. Place an order

Select the amount of shares you'd like to buy, and the price you are willing to pay for them.

Find the right account for you

If you’d like to speculate on the price movements of shares without having to buy them, you can do so using leveraged products like CFDs.1 For more information on leveraged share products, see our CFD share trading page.

Open an account now

There's no minimum balance to open an account, it takes less than five minutes, and there's no obligation to fund or trade.

You might be interested in...

  • Share trading

    With an IG Share Trading account you can buy and sell shares from just $8.

  • CFD trading

    Trade across a range of more than 15,000 financial markets.

  • Learn about IG

    See how we've been changing the face of trading for more than 40 years.

1 All trading involves risk. Losses can exceed deposits.

Contact us

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1800 601 734

You can also call +61 (3) 9860 1799
email helpdesk.au@ig.com or tweet us at @IGClientHelp