Shares

Introduction to Shares

A share of stock is actually a portion of ownership in a given company. Few stockholders own large enough stakes in a company to play a major decisionmaking role. Instead, stockholders purchase stocks, hoping that their investments rise in price, so that those stocks can be sold at a profit some time in the future.

Order Types

Market order

When you place a market order, you’re essentially telling a broker to buy or sell a stock at the current market price. A market order is the way your broker normally places an order unless you give him or her different instructions. The advantage of a market order is that you’re almost always guaranteed that your order is executed as long as willing buyers and sellers are in the marketplace.

Limit order

If you want to avoid buying or selling stock at a price higher or lower than you intend, you must place a limit order instead of a market order. When placing a limit order, you specify the price at which you’ll buy or sell.

You can place either a buy limit order or a sell limit order.

Stop order

You may also consider placing your order as a stop order, which means that whenever the stock reaches a price that you specify, it automatically becomes a market order.

Stop-limit order

You can protect yourself from any buying or selling surprises by placing a stop-limit order. This type of order combines the features of both a stop order and a limit order. When your stop price is reached, the stop order becomes a limit order rather than a market order.

A plan how to trade on shares

Open Brokerage Account

Select your stocks

Decide how many shares to buy

Choose your order type

You’re now a stock investor