How To Buy Shares Online

Looking to buy shares online?

We look at what you need to consider & how to select a share trading platform.

In today’s society, it is of course possible to buy just about anything online.

This is most certainly the case when it comes to purchasing shares – instead of telephoning your stockbroker to buy or sell shares, you can now do so at the click of a mouse or tap of a screen via an online trading platform.

You can open an account on the trading platform of your choice in a matter of minutes – you just need some basic details to hand such as your bank account details, identity documents and national insurance number.

We look at:

How to buy shares online

Our view:  The next generation of online trading platform apps means you can get setup & buy shares in as little as 10 minutes!

  1. Select a share platform – See below our 5 top platform picks
  2. Open your share account – To do this you will need your bank details and national insurance number
  3. Fund your account – You will need to fund your a/c with a debit or credit card or bank transfer
  4. Search for the share using the  stock code – Type in the stock code of the share you want to buy into the search box
  5. Check out the latest info and price for  – Some platforms offer free research and analysis
  6. Buy  shares – Nice and easy!

5 top picks for buying shares

 

Buy & Sell SharesHow To Buy Shares Online Fair Investment

Capital is at risk. 

  • Buy & sell shares commission FREE
  • Free account
  • trusted by millions of users in more than 140 countries
  • Editors choice: Great for beginners!

Go To Site »

 

 

Buy & Sell Shares

Capital is at risk. How To Buy Shares Online Fair Investment

  • Buy & sell US shares commission FREE & UK shares from £3 per trade
  • Free account
  • Trade & Invest in 16,000+ international shares

Go To Site »

 

Buy & Sell Shares

Capital is at risk.How To Buy Shares Online Fair Investment

  • Buy & sell shares from £2.95
  • Free account
  • Get 100 FREE trades (when you open an a/c – T&Cs apply)

Go To Site »

 

 

Buy & Sell Shares

Capital is at risk.How To Buy Shares Online Fair Investment

  • Buy & sell shares from £5.95 to £11.95
  • No charge if you trade only shares
  • No 1 investment platform in UK for private investors

Go To Site »

 

Buy & Sell Shares

Capital is at risk.How To Buy Shares Online Fair Investment

  • Buy & Sell shares from £7.99
  • Account fee of £9.99 pm (Covers you for mutiple accounts)
  • 1 free trade pm
  • Over 40,000 UK & global shares to choose from

Go To Site »

What is an online share trading platform?

In short a platform is a website or mobile app which offers users the ability to buy and sell investments including shares, investment trusts, exchange traded funds (ETFs), unit trusts and OEICs as well as other types of asset such as corporate bonds and commodities.

There are 2 ways to buy and sell stocks online

You can invest in stocks directly via a share dealing service or you can speculate on share prices using leveraged trading products.

a. Investing in shares

Share dealing services enables you to invest in company shares with a view to selling them for a profit at a later date.

When you buy shares you become a part owner of that Company and gain shareholder rights including any income that is paid as dividends.

Different share dealing services have different charging structures. Some platforms offer commission free share dealing, but most operate on a fixed fee per trade with usually a reduction in this fee if you carry out more than a certain number of trades per month.

With profits you make on share trading capital gains and dividends earned may be subject to tax at your personal rate. Tax can be mitigated if you trade within an ISA or Self Invested Personal Pension account.

b. Shares Trading

With derivatives trading you can use products such as CFDs and spread bets to speculate on a share’s price increasing or decreasing without having to take direct ownership of the shares themselves.

CFDs (Contracts For Difference) and spread betting are leveraged products, which means you can gain full exposure to company shares while only putting down a small deposit. While this magnifies possible profits, it does the same for losses.

CFDs & spread bets are popular among short term traders as profits and losses are realised immediately – making it faster to open and close trades. However, this doesn’t mean you can’t use them for longer-term positions too. You’d just need to consider the costs involved in maintaining a position – such as overnight funding – and the bet duration as spread bets do have fixed terms.

They also enable you to buy and sell shares online without ever owning the underlying asset. This has tax benefits and means you can trade both rising and falling markets (Tax laws are subject to change).

Why use a online share trading platform?

 Benefits of using a trading platform include:

  • Lower trading costs
  • Easy access to the UK and global share market
  • 24/7 access to your investments online
  • You can hold all your tax efficient investments such as ISAs and SIPPs in one place:  including lifetime ISAs, right to buy ISAs and  junior ISAs
  • Plus any other fund holdings or shares that you’re trading outside of a tax-free environment, from a general trading account

You should always pay close attention to the charges you are likely to pay, and the fees charged by different platforms can vary considerably, but you may well find that the dealing charges on an online trading account are lower than the fees you might pay to use a traditional stockbroker.

It may well be the case that the platform offers reduced fees to clients who frequently use their services to buy and sell shares.

By managing your shares online, you have 24/7 access.

What do online share trading platforms offer?

 Using an online trading platform offers you flexibility and convenience when buying investments compared to the the more traditional offline/telephone stockbrokers.

Typically, the platform you select will offer access to investments from stock exchanges around the world. Some platforms are more extensive than others so depending on what you are looking for compare options before you apply.

As well as a direct trading account some platforms offer ISA accounts, Junior ISA accounts and Self Invested Personal Pension (SIPP) accounts.

Most stocks and shares ISA customers invest in the stock market in an indirect way, via unit trusts, investment trusts, exchange traded funds, open ended investment companies and similar arrangements. Using an online trading platform allows you to invest in individual company shares via your ISA.

As an additional option, most platforms will allow you to buy products such as Contracts For Difference (CFDs), or to engage in spread betting.

These allow you to speculate on whether the price of a particular share will increase or decrease in value, and there is the potential to achieve significant gains without you actually needing to purchase the shares themselves.

The platform may also allow investment in currencies and cryptocurrencies or allow you to engage in an increasingly popular option known as ‘copy trading’.

With copy trading, also known as social trading, you essentially choose whether to follow the investment path already chosen by an experienced trader.  Platforms such as eToro offer customers the option of copying trades of successful traders. This can be an attractive option for new traders where you don’t have to decide when to buy or sell. For more info on what is copy trading and how does it work click here.

A trader will open an investment position and will broadcast the position they have taken. You might then follow, or ‘copy’ what they have done. If you are on an automated trading platform, you will automatically adopt that position.

Many investors are prepared to pay a bit more in fees  for a platform that offers really useful apps and services.


IMPORTANT:

No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular plan. If you are at all unsure of the suitability of a particular product, both in respect of its objectives and its risk profile, you should seek independent financial advice.

The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 67%-75% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

Tax treatment of ISAs depends on your individual circumstances and is based on current law which may be subject to change in the future. ISA transfer charges may apply, please check with your provider.

Written by Editorial Team ,
18th February 2021