How To Transact (Buy Or Sell) In Shares In An Equity Market?

  • Nov 17, 2018 AEDT
  • Team Kalkine
How To Transact (Buy Or Sell) In Shares In An Equity Market?

Selecting an online share trading platform: Buying and Selling, relates to trading or investments in the shares being done through a computerized trading system linked with the stockbroking firms or investors around a specific country. To establish a seamless process, investors engage an agent, well known to be a stockbroker for buying/selling of shares on his/ her behalf. The investors can choose from many brokers that are available. For instance, investors can go to www.asx.com.au, where a list of discount and full-service brokers is provided that cater to trading in Australian equities. In Australia, the number of stockbroking firms has surpassed 90 - 100 range and these specific firms are into the business of buying and selling of shares on ASX. These may include brokers that provide full services. Additionally, there are some non-advisory companies that help investors to buy and sell shares merely on an instruction driven process. Choosing an online share trading platform is often considered one of the most difficult process of buying and selling of shares. There are a lot of platforms available to Australian investors to invest. Even “Big Four” and other major banks also provide these services, while others are provided by specialist share brokers. When choosing an online share trading platform the investor should consider things such as Brokerage fees, in what exchange the investor can trade as some platforms offer access to the ASX only, while others also allow one to trade on stock exchanges all around the world. Other things to be considered is ease of use, who the platform is suited for (casual investors or active and experienced traders), customer support etc.

Finding the buyer or seller: Opening up an account with a broker requires the completion of paperwork in which the investor has to give his details and certain authentic proofs. Then a minimum amount of money, as required by the broker or for transaction purposes, can be put into an account and subsequently investors can start buying or transacting in shares. The order can be specified in a computerized trading system that is made available at a stockbroking firm or some individual zones for transacting in stocks/ shares. The trading system searches for a seller in the market and finds out about who is prepared to sell shares for the price the investors are willing to buy the shares. If the investor wants to purchase shares in a ‘float’ or ‘Initial Public Offering’ he can do it through a stockbroking firm.

Choosing the shares you want to buy: The investor has to decide which share to buy and in which quantity to buy. For this the investor has to start researching about the stocks that match his investment goals. There is a wide range of market research documents, analysis and even trading recommendations available, which can be used to make a buying or selling decision. The investors sometimes hire specialists to help on recommendations and the portfolio management.

Placing the order: There are two main options while placing an order to buy shares. They are Market orders, means that the investors want to buy a share immediately at the best price currently available. The other one is Limit orders, which means the investors set a maximum purchase price for the buy order. If that price becomes available within the specified time period, the trade will get executed.

Paying for the transaction: The investor has to pay for the value of share within the trade settlement period, which is on the ASX and Chi-X is two business days, commonly referred to as T+2.

Selling of shares: After monitoring the performance of the shares as per the investment plan, the investors may decide to sell the shares. The process of selling of shares involves the similar procedure done for buying of shares. In this also, the investor can choose whether he wants to sell them through a market order or a limit order.


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