how do you buy shares in the stock market

This guide answers how do you buy shares in the stock market: it explains what shares are, how public markets and brokerages work, how to choose and open an account (including Bitget options), orde...

2025-09-02 08:42:00

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Introduction

If you search "how do you buy shares in the stock market" you want a clear, step-by-step explanation of how retail investors acquire ownership in publicly traded companies. This guide explains, in plain language, what shares represent, where they trade, the role of brokers, order types and execution, settlement, costs and taxes, plus practical checklists and a sample trade. It focuses on buying shares via regulated brokerages and exchanges (U.S.-centric examples) and highlights Bitget’s brokerage and wallet options when relevant.

Overview of stock ownership and markets

A share (or equity) represents a unit of ownership in a publicly traded company. Owning shares typically gives you:

A proportional claim on the company’s assets and earnings.
Potential voting rights (for common stock) on corporate matters.
Potential entitlement to dividends when distributed.

Types of stock

Common stock: Most retail investors buy common shares, which usually carry voting rights and variable dividends.
Preferred stock: These often pay fixed dividends and have priority over common stock in the event of liquidation but generally have limited voting rights.

Where shares trade

Primary market: When a company issues new shares (e.g., during an IPO), investors may buy directly in the primary market.
Secondary market: Most retail activity occurs here — shares listed on exchanges such as NYSE and Nasdaq are bought and sold among investors. Brokers route orders to execution venues where matching occurs.

Note: this article addresses how do you buy shares in the stock market via brokerages and regulated exchanges—not cryptocurrencies or private, unlisted securities.

Why buy shares

People buy shares for several reasons:

Capital appreciation: hoping the stock price rises over time.
Income: receiving dividends from profitable companies.
Diversification: adding equity exposure to a broader portfolio.

Typical horizons and risk/return

Stocks are suitable for medium- to long-term horizons because short-term price swings can be large. Higher expected returns come with higher volatility and potential loss of principal; match stock exposure to your goals and risk tolerance.

Preparing to buy: goals, risk tolerance and investment strategy

Before placing trades, clarify:

Financial goals: retirement, saving for a house, passive income, etc.
Time horizon: short (<3 years), medium (3–10 years), long (>10 years).
Risk tolerance: capacity and willingness to accept price declines.

Choose an approach

Buy-and-hold: invest in quality companies or broad index funds and hold long-term.
Active trading: frequent buying/selling to capture short-term moves (requires more time, knowledge, and risk tolerance).
Index investing: use ETFs or index mutual funds for diversified exposure with low costs.

Basic asset allocation

Determine an allocation across stocks, bonds, and cash that fits your goals. Younger investors often hold higher equity shares; retirees usually reduce risk and increase income-oriented or stable assets.

Choosing a brokerage or trading platform

One of the first practical steps to answer "how do you buy shares in the stock market" is selecting a brokerage. Your broker is the platform that executes trades, holds custody of shares, and gives you account access.

Types of brokers

Discount brokers: Low-cost platforms offering execution, research tools, and mobile apps — suitable for most retail investors. For U.S.-centric trading with crypto-web3 features, Bitget offers an integrated brokerage and Bitget Wallet for custody when relevant.
Full-service brokers: Provide personalized advice, portfolio management and holistic financial planning; higher fees.
Robo-advisors: Automated portfolio management based on your goals and risk profile—good for hands-off investors.
Direct purchase plans / DSPPs: Some companies allow buying shares directly without a broker, but availability is limited.

When recommending broker features, Bitget is an option for traders who also want integrated wallet services and educational resources that align with web3-native workflows.

Account types

Taxable brokerage account: Standard account for buying and selling shares; gains and dividends are taxable.
Retirement accounts (IRA, Roth IRA): Tax-advantaged accounts for retirement savings; rules limit contributions and withdrawals.
Custodial accounts: For parents or guardians investing on behalf of minors.

Select the account type that matches your tax and retirement planning needs.

Fees, commissions and platform features to compare

Compare brokers on:

Commissions and per-trade fees (many brokers offer commission-free trading on U.S. stocks).
Spreads and order execution quality.
Margin interest rates (if you plan to trade on margin).
Account or inactivity fees.
Research tools, educational materials, and mobile app usability.
Access to international markets if you plan to trade non-U.S. stocks.
Security measures and regulatory compliance.

Bitget positions itself as a compliant trading platform with wallet integration and educational resources suitable for new and intermediate investors.

Opening and funding an account

Checklist to open a brokerage account:

Choose account type (taxable, IRA, custodial).
Complete online application: personal info, Social Security number (U.S.), employment and financial data for regulatory KYC.
Identity verification: upload ID documents for KYC/AML.
Link a bank account: for ACH or wire funding.
Choose funding method: ACH transfer (2–5 business days), wire transfer (same day in many cases), or transfer existing brokerage assets.
Wait for account approval and funding before trading.

Timing: basic accounts often approve in 1–3 business days; funding timelines depend on transfer method.

When setting up, consider enabling two-factor authentication and reviewing the broker’s custody and SIPC-like protections.

Researching investments and building a watchlist

Answering "how do you buy shares in the stock market" responsibly includes doing research before buying. Build a watchlist of tickers you follow and set alerts for price or news events.

Fundamental analysis basics

Key items to study:

Financial statements: income statement, balance sheet, cash flow statement.
Growth metrics: revenue growth, earnings per share (EPS) trends.
Valuation ratios: Price-to-Earnings (P/E), Price/Earnings-to-Growth (PEG), Return on Equity (ROE).
Dividend sustainability: payout ratio and free cash flow.

Fundamentals help assess whether a company’s stock price reasonably reflects its business prospects.

Technical analysis basics

Technical analysis looks at price and volume trends to time entries and exits. Common tools:

Moving averages: 50-day, 200-day trends.
Support and resistance levels.
Indicators: RSI (momentum), MACD (trend changes).

Technical tools can help with trade execution timing, but fundamentals matter for long-term investing.

Using ETFs, mutual funds and other stock-like instruments

If you want diversification or sector exposure without selecting individual stocks, consider:

ETFs: traded like stocks, often low-cost and liquid.
Mutual funds: may require minimums and trade at end-of-day NAV.
Index funds: passive vehicles tracking a broad market index (e.g., S&P 500).

ETFs and index funds are efficient for most investors seeking diversified equity exposure.

Order types and execution

Understanding order types is central to answering "how do you buy shares in the stock market." The order you place determines price certainty, execution risk, and market exposure.

Common order types

Market order: Executes immediately at the best available price. Use when you prioritize execution speed over exact price.
Limit order: Sets a maximum buy price (or minimum sell price). Guarantees price limit but not execution.
Stop order (stop-loss): Becomes a market order once a trigger price is hit—used to limit losses.
Stop-limit order: Combines stop trigger with a limit on execution price—avoids execution at extreme prices but may not fill.

When buying shares, many beginners use market orders for liquid large-cap stocks, but limit orders provide more price control.

Order duration and special instructions

GFD (Good for Day): Expires at market close if not filled.
GTC (Good till Cancelled): Remains until filled or cancelled (broker limits often apply, e.g., 60–90 days).
All-or-None (AON): Requires the full quantity to be filled or none.
Fill-or-Kill (FOK): Fill immediately in full or cancel.

Choose duration and flags based on liquidity and your tolerance for partial fills.

Partial fills, order routing and execution venues

Orders may be partially filled if liquidity is limited. Brokers route orders to exchanges, market makers, or dark pools; execution venue and routing policies affect fill price and speed. Retail brokers often publish execution quality reports.

Step-by-step: placing your first trade

A practical walkthrough of how do you buy shares in the stock market:

Select the ticker symbol (e.g., META for Meta Platforms) and confirm it matches the intended company.
Decide quantity: whole shares or fractional shares (if offered).
Choose order type: market for immediate execution or limit to control price.
Review estimated cost including commissions (if any) and regulatory fees.
Place the order and monitor for confirmation (order status: submitted → partially filled → filled).
After execution, review trade confirmation and account positions.

Example: Buy 10 shares of XYZ using a limit order

Choose ticker XYZ.
Set limit buy at $50 per share for 10 shares.
Order submits as GTC for 30 days.
If executed at $50 or better, confirm filled quantity and cost; otherwise, order remains open.

Throughout this guide, the phrase "how do you buy shares in the stock market" appears as the central question we answer by describing these practical steps.

Fractional shares, DRIPs, IPOs and alternative ways to acquire shares

Fractional shares: Many brokers allow buying a portion of a share, enabling diversification with small amounts.
DRIPs (Dividend Reinvestment Plans): Automatically reinvest dividends into additional shares, often without commissions.
DSPPs (Direct Stock Purchase Plans): Some companies sell shares directly to investors.
IPO participation: Retail access to initial public offerings varies by broker; allocations can be limited.
ADRs (American Depositary Receipts): Allow U.S. investors to buy foreign company exposure via U.S.-listed certificates.

These alternatives can make it easier to start investing with limited capital.

Settlement, custody and record-keeping

Trade settlement: U.S. equity trades typically settle on T+2 (trade date plus two business days). Settlement moves cash and securities between parties.
Custody: Your broker holds shares in street name for safekeeping; you hold beneficial ownership. Brokers provide account statements and trade confirmations.
Record-keeping: Maintain records for tax reporting—brokerage platforms (including Bitget) provide annual statements and 1099 forms when applicable.

Costs, fees and taxes

Costs and taxes can materially affect net returns. When addressing "how do you buy shares in the stock market," consider these items.

Trading costs

Commissions: Many U.S. brokers offer commission-free trading on stocks, but verify for specific account types or trade types.
Bid-ask spread: The difference between the buying price and selling price; wider spreads increase execution cost.
Slippage: The difference between expected price and execution price, especially in volatile or illiquid stocks.

Ongoing costs

Account fees: maintenance or inactivity fees.
Margin interest: charged when you borrow to buy shares.
Fund expense ratios: Mutual funds and ETFs charge management fees that reduce returns over time.

Tax considerations

Dividends: Qualified dividends may be taxed at lower capital gains rates; ordinary dividends are taxed as income.
Capital gains: Short-term (assets held ≤1 year) taxed at ordinary income rates; long-term (>1 year) taxed at preferential rates.
Wash-sale rule: Disallows a tax loss if you repurchase a substantially identical security within 30 days of the sale.

Keep record-keeping accurate and consult tax guidance for your jurisdiction. This is educational; not tax advice.

Risk management and portfolio construction

Building a portfolio that aligns with your goals helps manage risk while pursuing returns.

Position sizing and diversification

Rule of thumb: avoid overly large single-stock positions unless you understand the concentrated risk.
Diversify across sectors and asset classes to reduce idiosyncratic risk.

Using stop-losses, protecting gains and rebalancing

Stop-loss orders can limit downside but may trigger on short-term volatility.
Periodic rebalancing (e.g., annually) maintains target allocations.

Margin, leverage and short selling — risks and mechanics

Margin: Borrowing to buy more shares magnifies gains and losses and can trigger margin calls.
Short selling: Selling borrowed shares to profit from price declines carries theoretically unlimited downside risk.

These advanced techniques require careful understanding and higher risk tolerance.

Investor protection, regulation and due diligence

Regulatory bodies and protections

SEC (Securities and Exchange Commission): Oversees securities markets and disclosure rules.
FINRA (Financial Industry Regulatory Authority): Regulates broker-dealer conduct in the U.S.
SIPC (Securities Investor Protection Corporation): Protects customers if a broker fails, up to coverage limits; it does not protect against market losses.

Checking brokers and advisors

Use available tools to vet brokers and advisors (e.g., broker check systems and published disclosures). Review account agreements, custody practices, and fee schedules.

Avoiding fraud and common scams

Common red flags: unsolicited investment offers, pressure to act quickly, guaranteed-high-return claims, and requests to move assets outside regulated platforms. Always verify regulatory registration and client reviews.

Advanced topics and other considerations

Algorithmic trading, APIs and high-frequency trading basics

Automated trading uses algorithms to place orders quickly. Some brokers provide APIs for systematic strategies. Retail involvement in sophisticated high-frequency approaches is uncommon and requires technical expertise.

Tax-advantaged strategies and retirement accounts

Using IRAs, Roth IRAs and employer 401(k) plans provides tax benefits for retirement savings. Contribution limits and rules apply.

International investing and currency considerations

ADRs enable U.S.-dollar access to foreign companies.
Trading on foreign exchanges involves currency risk, different settlement customs, and potentially different tax implications.

Practical checklist and sample walkthrough

Concise checklist: how do you buy shares in the stock market — step-by-step

Define goal, time horizon, and risk tolerance.
Choose account type (taxable vs. retirement).
Pick a regulated broker (consider Bitget for integrated trading and wallet features).
Open and fund account with bank link or transfer.
Research investments and build a watchlist.
Decide order type and size; place test trade if new to the platform.
Monitor execution and review confirmation.
Keep records for taxes and rebalance periodically.

Sample walkthrough (illustrative, not advice)

Objective: Buy shares of META (ticker example for platform mechanics).
Step 1: Confirm ticker (META) and market hours.
Step 2: Decide to buy 2 shares with a limit order at $655.
Step 3: Place a GFD limit buy at $655 for 2 shares.
Step 4: Order executes; check confirmation and new position.

This demonstrates practical steps for executing a trade on most brokerages.

Example company snapshot (news context)

As an example of how company news can affect investor interest, consider Meta Platforms. As of December 2025, according to Motley Fool, Meta Platforms (ticker META) had a market capitalization reported near $1.7 trillion and a quoted share price around $656.46 at one snapshot. Recent company reporting showed third-quarter revenue of $51.24 billion (up 26% year-over-year) and large capital expenditures planned (projected $70–72 billion for 2025). These quantifiable metrics (market cap, price, revenue, capex) are typical data points investors review before deciding how do you buy shares in the stock market in a particular company.

Reported data summary: as of December 2025, according to Motley Fool — market cap ~$1.7T; snapshot price ~$656; third-quarter revenue $51.24B; ad revenue ~$50.08B; capex guidance $70–72B. Source: Motley Fool reporting (December 2025).

Note: the above is a factual example and not an investment recommendation.

Glossary of common terms

Share: Unit of ownership in a company.
Ticker: Short symbol identifying a traded security.
Bid/Ask: Highest buyer price (bid) and lowest seller price (ask).
Spread: Difference between ask and bid.
Market order: Order to buy/sell at best available price.
Limit order: Order specifying a maximum buy or minimum sell price.
Dividend: Company distribution of earnings to shareholders.
Settlement: Final exchange of funds and securities (T+2 for U.S. equities).
Margin: Borrowed funds used to buy securities.
ETF: Exchange-traded fund — pooled investment traded like a stock.
DRIP: Dividend Reinvestment Plan.

References

NerdWallet — guides on how to invest in stocks and buy/sell mechanics.
Charles Schwab — steps for buying stocks.
E*TRADE — how to trade stocks (education pages).
FINRA — buying and selling securities resources.
Investopedia — trading basics and order types.
Vanguard — how to invest online.
U.S. Bank — investor education.
Motley Fool — reporting on Meta Platforms, December 2025 (as cited above).

(These are the primary sources used to compile the procedural and regulatory descriptions in this guide.)

Next steps

If you’re ready to apply what you’ve learned about how do you buy shares in the stock market, consider opening a demo or live account with a regulated broker that fits your needs. Bitget provides brokerage services and an integrated Bitget Wallet for custody and educational tools for new investors; check account features, fee schedules, and applicable regulatory protections before funding an account.

Happy learning and trade carefully—understanding the mechanics, costs, and risks will help you make more informed decisions.

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.