Buying stocks online is done by opening a trading account through an online broker, such as eTrade or Scott Trade, just to name a couple of the big ones. You are set up with what is called a ‘trading platform’, and from the comfort of your own home you can open up charts, view historical data and buy stocks online.

The pluses of being able to buy stock online like this are many, as you can probably see already. The simplicity of trading from your own home, mixed with the beauties of competition have allowed stock traders and buyers alike the unique advantage of being able to make a stock purchase for a few bucks; usually between $3 and $7, from the numerous online brokers I have taken a look at and used. Indeed stock buying has never been more simple or affordable.

So how do you get started buying stock online? You’ll want to start by doing a little bit of due diligence on the different online brokers available to you. Doing a simple internet search for online broker reviews will probably bring you to a couple of forums where you can see what other people have said about their online trading brokers. After you choose one, you will need to register and sign up with that broker. They will have a pretty standard online sign-up form for you to fill out, then you will fund your account using a few different options available, and finally you are ready to buy stocks online.

Although mostly positive, there can be down falls to the simplicity of being able to buy stocks online. Being that it is much more simple and cheap to buy stocks, the allure of over-trading, under the guise of ‘day trading’, is always a threat. People, in their search for the best stocks to buy, will often find themselves scalping, or buying and selling very quickly, or falling for every little IPO or thinking they want to buy penny stocks for a quick buck. Don’t fall into these traps. Instead, focus on why you are buying stock in the first place and slowly grow your portfolio over time. That is how to buy stocks online.

You might work for a large, publicly traded company where you can buy stock in that company.  They might even give you stock as a bonus, or as a part of your pay.  This is probably the case if you work at a place like Wal-Mart, Nike, or many others.  This of course won’t include most people, as 80% of people are employed by small businesses. In addition to this, however, there are many companies that will sell you stock in their companies directly. General Electric (GE), Home Depot (HD) and many others will let you take part in these direct stock purchase programs.

The Traditional Route: A Stock Broker

You know, the old guy that has an office down on Main Street.  Stock Brokers buy stock on behalf of clients, often times giving advice along the way. I know, I’ve heard the joke as well: Why is the guy who gives you financial advice called a stock ‘broker’. Good question.

Online Stock Brokers

Take the idea of the stock broker, but give him a webpage and now you have an online stock broker.  Something like that, at least. When you open an account with an online brokerage in this way, you are given what is called a trading platform. Basically this is a computer software where you are able to login, see charts and graphs of all the different stocks you could imagine, and place trades, deciding on the spot what you want to buy and what you want to sell.  Buy stock from the comfort of your own home? I know. A novel idea.  I worked for a period of time for an online broker. In a sense it was like a regular broker, only that we didn’t give trading advice of any kind, we basically helped people to set up trading accounts so they could get going on their own.  It is a very simple thing to do. The hard part? Know which stocks to buy!