LESSON 02
How to Buy and Sell Stocks for Beginners
Learning how to buy and sell stocks for beginners starts with understanding what a brokerage order screen is asking you to enter. This lesson explains ticker symbols, shares, Buy and Sell buttons, market orders, limit orders, bid, ask, and how to review an order before submitting it.
BEGINNER PATH · LESSON 2 OF 5
How to Buy and Sell Stocks for Beginners: Start With the Ticker Symbol
A ticker symbol is a short group of letters used to identify a publicly traded company or exchange-traded fund.
For example, a brokerage may allow you to search using either a company’s name or its ticker symbol. Before placing an order, confirm that the name and ticker displayed are the investment you intended to select.
Company:
Ticker:
Example Company
XYZ
Beginner Note: Companies can have similar names. Always review the full name and ticker before continuing.
What Is a Share?
A share represents a small ownership interest in a company or fund. The number of shares entered into an order determines how much of the investment you are attempting to buy or sell.
Stock price:
$25.00
Shares:
4
Estimated purchase amount:
$100.00
The estimated amount may change before an order is filled. Fees or other charges may also apply depending on the brokerage and investment.
Buy and Sell Do Different Things
Buy
A Buy order attempts to add shares of an investment to your account.
Example: You currently own 0 shares and submit an order to buy 5 shares.
Sell
A Sell order attempts to reduce or close shares that you already own.
Example: You currently own 5 shares and submit an order to sell 2 shares. If the order fills, 3 shares remain.
Do not confuse “Sell” with advanced short selling. Boom Stalker’s beginner path focuses first on selling investments that are already owned.
Market Order
A market order attempts to buy or sell at the best currently available price.
- It prioritizes completing the order
- The final price is not guaranteed
- The price may change between submitting and filling the order
- Fast-moving or thinly traded investments may fill at a different price than expected
Limit Order
A limit order allows the investor to set a maximum purchase price or a minimum selling price.
- A Buy limit sets the highest price the investor is willing to pay
- A Sell limit sets the lowest price the investor is willing to accept
- The order may not fill
- Setting a limit price does not guarantee execution
Current displayed price: $25.00
Market Buy: Attempts to purchase at the best available price
Limit Buy at $24.50: Only becomes eligible to fill at $24.50 or lower
Market orders prioritize execution. Limit orders prioritize price control.
What Are Bid and Ask?
Bid
The highest price a buyer is currently offering.
Ask
The lowest price a seller is currently requesting.
Spread
The difference between the bid and ask is called the spread.
Bid:
$24.98
Ask:
$25.02
Spread:
$0.04
A wider spread can increase the difference between the price someone expects and the price they receive.
What Does “Time in Force” Mean?
Time in force tells the brokerage how long an order should remain active.
Day
The order normally remains active for the current trading day. If it does not fill, it expires.
Good ’Til Canceled
The order may remain active beyond the current day until it fills, is canceled, or reaches the brokerage’s expiration limit.
Available choices and expiration rules vary by brokerage. Always review the order details shown by the platform.
Review Before You Submit
Before sending an order, review the key details shown on the screen.
Correct ticker symbol
Correct company or ETF name
Buy or Sell selected correctly
Correct number of shares
Correct order type
Correct limit price, when applicable
Correct time in force
Estimated order amount
Available buying power or shares owned
The Review Order screen is your final opportunity to catch an input mistake before the order is sent.
What Happens After You Submit?
1
The brokerage receives the order.
2
The order is routed for possible execution.
3
The order may fill completely, fill partially, remain open, or be canceled.
4
If shares are purchased, they appear in the account after execution. If owned shares are sold, the position and available funds are updated.
Filled
The order was completed.
Partially Filled
Only part of the requested quantity was completed.
Open
The order remains active and has not fully completed.
Canceled
The order is no longer active.
Submitting an order does not always mean it will be filled immediately or at the displayed price.
A Simple Example Order
EDUCATIONAL EXAMPLE — NOT A REAL SECURITY OR RECOMMENDATION
Ticker:
XYZ
Action:
Buy
Shares:
4
Current displayed price:
$25.00
Order type:
Limit
Limit price:
$24.75
Time in force:
Day
Estimated maximum purchase amount:
$99.00
This order attempts to buy 4 shares of XYZ at $24.75 per share or lower. If the market never reaches an eligible price before the order expires, the order may not fill.
What You Still Need Before Trading
Knowing how to enter an order is only one part of the process. Before risking real money, you should also understand how to evaluate a setup, plan an entry, establish a stop, choose potential targets, size a position, and practice the process.
Key Takeaway
An order ticket tells the brokerage what you want to do. It does not tell you whether the investment or trade is a good decision.
Boom Stalker provides educational and research information only. It does not provide personalized financial advice, brokerage services, or instructions to buy or sell any security. Order types, features, execution methods, and terminology may vary between brokerage platforms. Investing and trading involve risk, including the possible loss of capital.