How to open a share trading account
How to choose the best share trading account for your needs and start investing in Australian and international markets.
If you want to invest in shares, you'll need to sign up to a stock broker. You have two choices here – you can hire the services of a traditional full-service broker or you can do the trading yourself through an online broker (aka share trading platforms).
Online brokers allow you to buy and sell shares in publicly listed companies over the Internet. Where previously you needed to call up a broker to buy and sell the shares for you, these days investors can trade directly by opening an online share trading account for a much lower cost.
This guide allows you to easily compare online share trading accounts, and takes you through the steps involved when choosing a platform.
Steps to open a trading account
- Choose a broker
- Select your membership level
- Provide ID
- Link bank account
- Submit application
- Start trading
Standard brokerage - Australian shares
Share Trading Account Offer
Competitive broker fees on Australian shares, international shares, forex and CFD trading.
- Brokerage - AU shares: From AUD 5 or 0.05%
- Brokerage - US shares: USD 0
- Sign-up process: Instant
- Support - After hours: Yes
Important: Share trading carries risk of capital loss.
Open a share trading account today
Important: Share trading can be financially risky and the value of your investment can go down as well as up. Standard brokerage fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares.
Why trade shares online?
When people think of share trading, many still imagine a crowded and chaotic trading room floor. The reality is that thanks to modern technology, the vast majority of share trading is done online. According to a report from Investment Trends, the number of active Australian online share investors grew from 595,000 in November 2014 to 635,000 in May 2017.
Trading shares online offers a secure and easy way to manage your investments. You can place trades at a time and place convenient to you, while buying and selling shares offers the potential to benefit from share price increases and also enjoy an income from dividend payments.
There are of course risks attached to trading shares, including the potential to lose the money you invest, so it’s important to make sure you’re aware of those risks before you start trading.
How do I choose an online share trading platform?
You'll need to carefully consider your trading needs before deciding on the right online share trading platform. Some of the issues to consider include:
- Trading knowledge and experience. Some online share trading platforms, for example CommSec and SelfWealth, are designed to suit retail investors, rather than institutional investors and traders. Other trading platforms have special features geared towards highly experienced traders, such as advanced charting tools, speedy execution of trades and live market data. These features may come at a cost, however, and may not add much value if you are a less experienced trader.
- Available markets. Some share trading platforms only provide access to companies listed on the Australian Securities Exchange (ASX) while others will also allow you to place trades on international markets. Some trading platforms will also provide access to other trading instruments, for example forex and contracts for difference (CFDs).
- The fees involved. There are two main costs you need to consider when choosing a share trading platform: the brokerage fee and the ongoing fee. The brokerage fee applies each time you place a trade and is usually around $10-$25, but could be higher based on the size of the transaction. Ongoing subscription fees are charged monthly and vary depending on the provider and the account features you select.
- Trading resources. From educational tutorials to research and investment advice, check what tools a platform offers to help you make informed trading decisions.
- Customer service. If you ever have a problem or need help with a trade, check to make sure you will be able to access prompt and helpful customer support.
How to open a share trading account
The exact process for opening a share trading account varies depending on the trading platform you select. However, you'll generally need to complete the following steps when signing up:
- Choose your broker. Research a range of options to find the online stockbroking provider that offers all the features you want at an affordable price. Some providers also offer a choice of share trading platforms, for example a free web-based platform for casual investors and a more complicated software package with a monthly subscription fee for experienced traders.
- Choose your membership level. Some providers offer a choice of membership tiers, each with a different level of features and a different ongoing fee. For example, you may need to choose between a Bronze, Silver or Gold trading account.
- Provide your details. You'll need to provide your full name and a valid form of photo ID, as well as your email address, phone number, residential address and Tax File Number (TFN).
- Link your bank account. You’ll need to supply details of the bank account which will be used to finance your trades and you may be required to deposit a minimum amount. Some share trading platforms will also require you to open a cash management account with a specific financial institution before you can start trading.
- Submit your application. Your application to open a share trading account will usually be processed within 1-2 business days.
- Start trading. Once your application has been approved you can login to your account and start trading.
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