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Now that you’re set up to trade stocks online, how do you actually go about executing the order and becoming the proud holder of the first stock in your dividend empire? Well, luckily buying and selling shares online is easy as long as you follow these general guidelines.
Pick your stock exchange
As we talked about last time, there are hundreds of options for where you can buy stocks. The beauty of the internet is that they’re all available at your fingertips! The biggest and most well known stock exchange is the New York Stock Exchange – home to consumer giants like GE, Proctor and Gamble, Coca Cola and McDonalds. This is a great place to start if you’re looking to buy well established dividend companies. But be careful if you’re not American and know the tax laws of holding foreign dividend paying stocks in your country!
Learn the code for the company
Stocks are usually identified by a three letter code or identifier. You’ll need this to place an order and usually you can just type in the name of the company into your online brokerage platform or Google to find out what the stock symbol is. Once you’ve got this, you’re about ready to make a trade.
Choose your type of order
Don’t want to sit around in front of your computer all day waiting for the right price to buy? Well, you don’t have to. There are a number of options available when you go to set up your trade, ensuring that you won’t buy your stock for a penny less than you want to. Some common types of orders include:
Market Order: Sets you to buy the stock at whatever it’s trading for at the time. This will always be executed right away.
Limit Order: You set the maximum price you want to pay for the stock. If the price reaches that point, you buy! If not, you don’t – it’s that simple. You can also specify whether the order is Good til Cancelled (GTC) or Good til End of Day (GTD). Once I’ve decided to buy something I usually set a GTC limit order at my preferred price.
That’s it! Hit ‘Buy’ and you’re now the proud owner of some dividend paying stock. Happy trading!
