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How to buy shares online in 2023

Read our 5-step guide on how to buy shares online in Australia.

Open a share trading account for free Compare online brokers

How to buy shares online

  1. Choose an online share trading platform
  2. Sign up for an account
  3. Choose the shares you want to buy
  4. Place your order
  5. Pay for the transaction

Share trading has become easier than ever thanks to online platforms, but for relative beginners, there are a few steps you need to know about.

When buying shares, the steps remain the same regardless of whether you are trying to buy Australian or international shares.

Step 1: Choose an online share trading platform

This sounds simple but choosing the right online share trading platform is an important first step.

There are dozens of platforms available to Australian investors – some of them are offered by the Big Four and other major banks, while others are provided by specialist sharebrokers.

While it might be more convenient to stick with your current bank, you could lose out in terms of brokerage fees. Instead, compare the features and fees of a number of platforms before choosing the right one for you.

Finder survey: What do Australians use to invest in the stock market?

Response
An online broker or share trading platform84.13%
Micro-investment app8.08%
Managed fund7.19%
Full-service stock broker6.29%
Other4.19%
Robo-advisor2.99%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023

Step 2: Sign up for an account

Once you've chosen a platform, you'll need to register for an account. This step is usually free, but keep in mind that some providers may charge subscription fees or ongoing fees for features such as market research. You might be asked to deposit a certain amount when you sign up or after your first order.

Either way, the registration process takes place online. If you're a new customer, you'll need to provide your basic information, including the following:

  • Your name, address, date of birth and contact details
  • Your tax file number (TFN)
  • Proof of ID
  • Linked bank account details

Step 3: Choose the shares you want to buy

You may have already decided what shares you want to buy, but if not, now is the time to start researching stocks that match your investment goals.

Some brokers will give you access to a wide range of market research, analyses and even trading recommendations through your platform, so use this information to help make an informed decision.

You’ll also need to consider the number of shares you want to buy.

This will depend on your budget and investment goals, but keep in mind that unless you already own shares in a company, the minimum amount of shares you can buy in Australia via the ASX is $500. So if company XYZ is valued at $2 a share, you’ll need to buy at least 250 shares. This is known as a parcel.

It’s also worth pointing out that larger purchases may incur higher fees or involve different fee structures depending on the trade.

If you're looking to get started, here are our best ASX stocks of 2024.

Ask an expert: How do you pick the right stocks?

Roger Montgomery

Roger Montgomery
CIO, Montgomery Investment Management

Only invest in quality companies. To identify a quality company search for a sustainably high rate of return on equity. High rates of returns on equity drive better long-term returns for investors in those companies. A company that can sustain such returns usually has a sustainable competitive advantage.

Step 4: Place your order

This is where things can get a little confusing for beginner share traders. You have 2 main options when placing a trade to buy shares: "at market" or "at limit".

  • Market orders. You place a market order when you want to buy a share immediately at the best price currently available.
  • Limit orders. Placing a limit order allows you to set a maximum purchase price for your buy order. If that price becomes available within your specified time, your trade will be executed.

Depending on the platform you choose, you may also be able to take advantage of a range of conditional orders that allow you to take advantage of market opportunities.

For example, you can set a "trailing buy order" to purchase a stock if the price dips temporarily. For instance, you could set a trailing price trigger of $40 with a stop value of 5%. This means your purchase order only goes through once the stock falls to $40 and then rises by 5% to $42.

Picture not described

IG Share Trading – limit order example. Image: Supplied

Once you’ve entered all the specifics of your transaction, you’ll get a chance to review all those details before placing your buy order.

What are bid, offer and last prices?

Some brokers display the "bid", "offer" (or ask) and "last" price of stocks. Think of these as similar to auction prices, where buyers and sellers of stocks are offering their best prices.

A bid price is the highest price any trader is offering to buy a company’s stock at that moment and the ask or offer price is the lowest price any seller is willing to accept. The last price is the last price bidders agreed upon.

When you set a limit order to purchase or sell a stock, you're creating a new "bid" or "offer" price.

Although the last price is the stock’s most recent price, it’s not necessarily what you can expect to pay if you make a market order. Instead, you’ll be paying the latest bid price and you’ll get the ask price when you sell.

Step 5: Pay for the transaction

You'll need to have sufficient funds in your online share trading account to cover the cost of the transaction, including the brokerage fees that apply.

In most cases, you can fund your account using a bank transfer, BPAY, credit card or debit card.

The trade settlement period on the ASX and Chi-X is 2 business days (commonly referred to as T+2), which means your account will be charged 2 days after you've bought the shares.

If you don't have enough funds in your account by the time you're charged, you'll be hit with a hefty late fee – typically around $100.

Bonus: Monitor the performance of your shares

After you've bought your shares, you'll need to monitor their performance in regard to your investment plan.

However, the frequency with which you monitor them will depend on your strategy.

For example, if you have a long-term investment strategy, you may only check in and see how your shares are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week.

Whichever option you choose, you can review the performance of your investments by logging in to your trading account.

What do you need to look out for?

  • Brokerage fees. This is the fee that applies to each buy or sell transaction. Remember to find a low-cost option as you don't want your returns eaten away by fees. Depending on the platform you choose and the size of your transaction, this could be a flat fee or a percentage of the total transaction cost.
  • Other fees. Brokers can charge all kinds of additional fees to use their platform. Some of the most common include an inactivity fee, subscription fee and foreign exchange fee.
  • What you can trade. Some platforms offer access to the ASX only, while others also allow you to trade on stock exchanges around the world.
  • Ease of use. Consider how easy each platform is for the type of trading you want to perform. Most providers give you the option of a free demo account for a short period so you can trial the features they offer.
  • Who the platform is suited for. Some share trading platforms are designed with casual investors in mind, while others are more suited to active and experienced traders.
  • Customer support. How easy is it to get in touch with the provider if you ever have any issues? Is its customer service team based locally in Australia?

There are plenty of other factors you'll need to take into account, so check out our guide to choosing an online share trading platform for more details.

How much does it cost to buy stocks?

Share prices range from less than 1 cent to thousands of dollars per stock. However, there are some rules around how much you need to invest.

There are 2 share trading models: CHESS-sponsored or custodian. If you sign up with a CHESS-sponsored broker, you will have to pay more in fees and higher minimum deposits, but it has the advantage of the shares being in your name. This means in the unlikely case of the broker going under, it is easier for you to get your shares back.

The custodian model means that shares are in the name of the broker. This means the broker is the legal owner and you are the beneficial owner of the shares. On the plus side, under this model, you can trade for less and in some cases buy fractional shares. On the downside, if the broker runs, you have less direct control over your investments and holdings. It's worth pointing out that most of the US brokers run on a custodian model.

Minimum investment

In Australia, there's generally a minimum $500 investment for every new ASX company you invest in if you choose a CHESS-sponsored model. So if BHP has a share price of $50, you'd need to buy at least 10 shares of BHP stock if it's your first time buying.

If you chose the custodian model, your minimum investment can be as low as 1 cent. For example, you can invest as little as a few cents into US stocks even if it's your first time buying. Some brokers also allow fractional investing where you can buy in fractions rather than whole stocks. So, say Facebook is priced at $200 a share – instead of investing $200, you could buy one-tenth of a share for $20.

Broker fees

The other main cost you need to think about is the brokerage or commission fee. This is the fee charged by your broker or share trading platform every time you buy or sell stocks. Brokerage fees are around $3–$30 on most share trading platforms under a CHESS model – sometimes called "discount brokers" – and anywhere from $50–$150 for full-service brokers. Some providers offer $0 brokerage under a custodian model.

However, watch out for other fees charged by brokers including the currency conversion fee (for foreign stocks), account fees, custody fees (for US stocks) and inactivity fees. These are important considerations since any fees you pay your broker will reduce your earnings and impact how much you invest per trade.

Will your profits cover the fees?

Say you invest $100 in Netflix stock with a broker fee of $10 a trade, a custody fee of 0.1% and an annual account fee of $50. If you bought no other stocks, you would need Netflix's stock price to rise by at least 71% in order to cover the fees you paid ($20 to buy and sell + $1 custody fee + $50 account fee). But if you'd invested $5,000, you'd only need its price to rise by 1.42%.

Compare online brokers

Name Product Price per trade Inactivity fee Asset class International
eToro
Finder AwardExclusive
eToro
$0
US$10 per month if there’s been no log-in for 12 months
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: Get 12 months of investment tracking app Delta PRO for free when you fund your eToro account (T&Cs apply).
CFD service. Capital at risk.
Join the world's biggest social trading network when you trade stocks, commodities and currencies from the one account.
Webull
Exclusive
Webull
US$0.25
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
Finder exclusive: Get an additional 30 days of $0 brokerage. Get advanced research and trading tools with $0 brokerage and free lvl 2 NASDAQ stock data for 30 days. T&Cs apply.
Trade ASX and US stocks and US options, plus gain access to inbuilt news platforms and educational resources. You can also start trading for less with fractional shares.
Moomoo Share Trading
US$0.99
$0
ASX shares, Global shares, US shares, ETFs
Yes
Get 10 free shares + earn 6.8% p.a. on idle cash upon deposit. T&Cs apply.
Trade shares on the ASX, the US markets and buy ETFs with Moomoo. Plus join a community over 20 million investors.
Tiger Brokers
US$2
$0
ASX shares, Global shares, US shares, ETFs
Yes
Finder exclusive: 10 no-brokerage US or ASX market trades in the first 180 days + 7% p.a. on uninvested cash with first deposit of any amount, plus US$30 TSLA + US$30 NVDA shares with deposits up to AU$2000. T&Cs apply.
Trade Australian, US and Asian stocks with no minimum deposit on Tiger Broker’s feature-packed platform.
CMC Invest
Finder Award
CMC Invest
$0
$0
ASX shares, Global shares, Options trading, US shares, ETFs
Yes
$0 brokerage on US, UK, Canadian and Japanese markets (FX spreads apply).
Trade over 45,000 shares and ETFs from Australia and 15 major global markets. Plus, buy Aussie shares or ETFs for $0 brokerage up to $1,000 (First buy order of each security, each day - excludes margin loan settled trades).
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Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Tips when buying shares in Australia

If you want to get more out of your online share trading, try to keep the following tips in mind:

  • Do your homework. Making informed trading decisions is crucial to the success of your investments. Research the financial health and growth prospects of companies by poring over annual reports, keeping an eye out for company alerts, reading share prospectuses and accessing research reports.
  • Stay up to date with the Australian economy. Keep an eye on the health of the Australian economy, Reserve Bank interest rate decisions, government policy changes, levels of investor confidence, exchange rates and the performance of share markets in Australia and overseas. All of these can influence whether it's a good time for you to invest.
  • Start with blue chip companies. One of the safest options for anyone starting out in the share market is to invest in blue-chip companies. These are Australia’s top 50 companies, as listed on the S&P/ASX 50, and are typically well-established companies. They usually offer the best chance for minimising your risk and providing steady returns.
  • What about speculative shares? Speculative companies are not in the top 100 Australian companies and have a shorter history of doing business. Some investors are attracted to buying shares in these companies because they offer the potential for large returns, but be aware that they also have the potential to suffer large losses.
  • Buy what you know. Rather than diving in at the deep end and investing in a company that operates in a field you have little or no understanding of, start with industries and businesses you have some sort of background knowledge of.
  • Diversify. If you want to minimise your exposure to risk, diversify your portfolio across a range of different industries. If you buy shares across 5 or 6 industries instead of just 1 or 2, you can be better protected against losses if 1 particular industry experiences a sharp downturn.

Risks of online share trading

Before you start buying and selling stocks like you’re Gordon Gekko, make sure you’re aware of all the risks involved, including the following:

  • Financial losses. A company’s share price can fall dramatically and even drop as far as zero. This can mean significant financial losses for investors.
  • Last in line. Shareholders are usually the last in line to be paid when a company goes broke. When this happens, there’s a definite chance that you won’t get your money back.
  • Stress. The share market fluctuates on a daily basis, which can cause plenty of stress for investors. If you can’t handle the ups and downs, you may be better off looking for a safer and steadier investment option.
  • Unexpected problems. Even if you do an enormous amount of thorough research into a particular company, it’s simply not possible to predict the future. Natural disasters, terrorist attacks, bad company news and even changes in government policy can all occur unexpectedly and adversely affect the price of shares.
  • Lack of expertise. While investing in the share market sounds quite easy in theory, it can get quite complicated if you don’t know what you’re doing. First-time investors should be wary of getting ahead of themselves.
  • Getting in over your head. A final word of warning if you’re thinking of investing in shares: Don’t bite off more than you can chew. Make sure to use your common sense and take a cautious approach – good advice no matter whether you’re planning on investing in shares, property or anything else.

Watch: How to buy shares in Australia

Frequently asked questions about buying shares online in Australia

To make sure you get accurate and helpful information, this guide has been edited by Moira Daniels as part of our fact-checking process.
Kylie Purcell's headshot
Written by

Investments analyst

Kylie Purcell is the senior investments editor and analyst at Finder. She has completed a Certificate of Securities and Managed Investments (RG146) and specialises in investment products including online brokers, robo-advisors, stocks and ETFs. See full bio

Kylie's expertise
Kylie has written 155 Finder guides across topics including:
  • Investment strategies
  • Financial platforms
  • Stockbrokers
  • Robo advisors
  • Exchange traded funds (ETFs)
  • Ethical investing
  • ASX stocks
  • Stock and forex markets

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2 Responses

    Default Gravatar
    GauravSeptember 19, 2023

    Hi,
    i hope u doing very well
    actually i want to start share market as my side husstle
    as i wanted to do this for long time but now i am capable to do thing my own can u pls guide me
    from where i can start from scratch.
    Thanks

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