how do you buy shares of stock in a company

How to Buy Shares of Stock in a Company

As of Jan 23, 2026, market headlines show elevated volatility and pattern-driven trading opportunities across equities, according to coverage from Barchart and Benzinga. This guide answers the practical question: how do you buy shares of stock in a company — explained step-by-step for beginners, with clear definitions, workflows, and what to expect when using broker and custody services (including Bitget options where relevant).

Short summary

Buying shares means acquiring an ownership interest in a publicly traded company. People buy stocks for capital appreciation, dividend income, and portfolio diversification. This guide explains core concepts, the main ways to buy shares, step-by-step instructions to place trades, order types and mechanics, settlement and custody, fees and tax considerations, risks and best practices, plus practical examples and FAQs.

Basic concepts

What is a share / types of shares

A share represents a unit of ownership in a company. When you buy a share, you own a small piece of that business and may benefit if the company grows or pays dividends.

• Common stock: The most widely issued class. Common shareholders usually have voting rights on matters like board elections. Common stockholders benefit from price appreciation but have the lowest priority in a liquidation.
• Preferred stock: Preferred shares typically pay fixed dividends and have priority over common stock for dividend payments and liquidation. Preferred shares may lack voting rights or have limited voting.

Key distinctions:

• Voting rights — Common shares commonly carry votes per share; preferred often do not.
• Dividends — Preferred shares often offer higher, more stable dividends; common dividends can vary.
• Risk & priority — In bankruptcy, creditors and preferred shareholders are paid before common holders.

When evaluating a company, check the company charter and filings for classes of shares, vote structure, and dividend policy.

Public markets and exchanges

Shares of publicly listed companies trade on exchanges, where buyers and sellers meet. Major exchanges in the U.S. include the NYSE and NASDAQ. These markets provide two main services:

• Liquidity: Buyers can usually find sellers and vice versa, making it practical to enter or exit positions.
• Price discovery: Continuous trading yields a market price that reflects supply and demand.

Exchanges operate with listing rules and reporting requirements that increase transparency. Public markets enable investors of all sizes to trade shares during market hours, with orders matched through brokers and electronic systems.

How ownership is recorded (registers, brokerage custody)

Ownership of shares is recorded and held in different forms:

• Registered ownership: Your name appears on the company’s shareholder register. This is less common for retail investors because many use brokers.
• Street name ownership: Most brokers hold shares in “street name” (the broker’s name) for ease of transfer and custody. You are the beneficial owner; the brokerage is the registered owner on paper.

Brokers and custodians provide account statements showing your holdings. The broker acts as custodian, maintains records, handles corporate actions (dividends, splits), and supplies tax documents. If you prefer direct recording, some companies offer direct registration services that move shares into your name.

Ways to buy shares

Through an online brokerage (discount and full-service brokers)

One of the most common ways to buy shares is through a brokerage account. Broker options vary by service level:

• Discount brokers / online brokers: Low-cost platforms, often mobile-first, offering self-directed trading tools, research resources, and fast executions. They are suited for cost-sensitive, active retail investors.
• Full-service brokers: Offer personalized advice, portfolio management, and deeper research. They charge higher fees but provide advisory support for complex needs.

How to get started with a broker:

1. Compare platforms for fees, available markets, research tools, and app quality.
2. Open an account, complete verification (ID, address), and fund the account.
3. Use the broker’s interface to search tickers, place orders, and monitor holdings.

Note: If you want a brokerage that integrates crypto, Web3 tools, or multi-asset trading, consider Bitget’s trading products and the Bitget Wallet for custody of crypto-linked assets and tokenized exposure. Bitget also offers educational resources and a range of order and execution options for retail users.

Direct stock purchase plans (DSPs) and dividend reinvestment plans (DRIPs)

Some companies offer direct stock purchase plans (DSPs) that let investors buy shares directly from the company or its transfer agent. Features:

• Periodic purchases: You can set up regular purchases (monthly/quarterly).
• Lower entry cost: DSPs can be cheaper for small recurring buys.
• Fees: Fees vary by company and plan — check plan documents.

DRIPs (Dividend Reinvestment Plans) automatically use dividends to buy additional shares (or fractions) of the company, compounding ownership over time without manual reinvestment.

Not every company offers DSPs/DRIPs; check a company’s investor relations materials for enrollment details.

Through a financial advisor or managed account

If you prefer professionals to manage trades, you can use:

• Human financial advisors: Provide tailored advice and execute trades on your behalf.
• Robo-advisors / managed accounts: Algorithm-driven portfolios based on your risk profile.

These services are suitable for investors who want delegated management, goal-based planning, or tax-aware strategies. Fees and minimums vary.

Buying fractional shares and alternatives

Fractional shares let you buy a portion of a high-priced stock rather than a full share. They are useful when:

• You want exposure to expensive stocks with limited capital.
• You use dollar-cost averaging with fixed-dollar contributions.

Fractional services are provided by many brokers; however, fractional ownership may be limited in transferability (you might not be able to withdraw fractional pieces as whole share certificates). Check your broker’s terms.

Buying via ETFs or mutual funds (indirect ownership)

If you want exposure to many companies or an index without selecting individual stocks, use ETFs or mutual funds. Benefits:

• Diversification: One fund can hold hundreds or thousands of stocks.
• Professional management (in mutual funds) or passive indexing (ETFs).
• Lower single-stock risk and easier rebalancing.

ETFs trade like stocks on exchanges; mutual funds transact at net asset value (NAV) at market close.

Step-by-step process to buy shares

Decide your objective and research companies

Before you buy, answer: why do you want the stock? Common objectives:

• Long-term growth (capital appreciation)
• Income (dividends)
• Speculative/short-term trading

Research sources:

• Company financial reports (10-K, 10-Q in the U.S.) and investor presentations
• Public filings and press releases
• Broker research and third-party analyst reports
• Financial statements (revenue, earnings, cash flow, debt)

Basic valuation and risk checks:

• Revenue and earnings trends
• Profit margins and free cash flow
• Balance sheet strength (cash vs. debt)
• Competitive position and industry dynamics

Maintain a watchlist and set criteria for entry, stop levels, and position sizing that match your objective.

Choose the appropriate account type

Your account choice has tax and withdrawal implications:

• Taxable brokerage account: Flexible, no contribution limits, capital gains taxed when realized.
• Individual retirement accounts (IRAs) or equivalents: Tax-advantaged (tax-deferred or tax-free) but subject to contribution limits and withdrawal rules.
• Custodial or trust accounts: For minors or estate planning.

Match the account to the goal: retirement savings often go into IRAs, while general investing goes into taxable accounts.

Open and fund a brokerage account

Typical steps:

1. Application: Provide personal details (SSN/tax ID, address, employment).
2. Verification: Upload ID as required.
3. Funding: Link your bank for ACH/bank transfer, wire transfer, or transfer assets from another broker (ACATS in the U.S.).

Account minimums vary. Some platforms let you start with no minimum; others require initial funding.

Place an order (symbols, quantity, preview)

Placing a trade:

1. Find the ticker symbol (unique stock code) for the company.
2. Choose quantity or dollar amount (for fractional shares).
3. Select order type (market, limit, stop) and time-in-force (day, GTC).
4. Preview the order (estimated fees, total cost), then submit.
5. Confirm execution and monitor your position.

Always double-check the ticker and market (e.g., separation between similar tickers) before submission.

Order types and execution mechanics

Market orders vs. limit orders

• Market order: Executes immediately at the best available price. Pros: speed and certainty of execution. Cons: price not guaranteed, may suffer slippage in fast markets.
• Limit order: You set the maximum (buy) or minimum (sell) price. Pros: price control. Cons: execution not guaranteed if price never reaches the limit.

Use market orders for small, highly liquid stocks when speed matters; use limit orders to control price or when trading less-liquid names.

Stop orders and conditional orders

• Stop-loss order: Becomes a market order when the stop price is hit — used to limit losses.
• Stop-limit order: Becomes a limit order at a specified price when the stop triggers — gives price control but might not execute.
• Conditional orders: Execute only if certain conditions are met (e.g., price and volume filters).

Stop orders help manage downside risk but can trigger in volatile markets; carefully set stop levels to avoid being stopped out on normal price noise.

Time-in-force settings

Common options:

• Day order: Expires at the close if not executed.
• Good‑til‑canceled (GTC): Remains active until executed or canceled (some brokers limit GTC duration).
• Immediate-or-cancel (IOC) / Fill-or-kill (FOK): Execute immediately for full or partial, or cancel.

Choose time-in-force based on whether you want the order active beyond the trading day.

Order routing and execution quality

Brokers route orders to exchanges or market makers. Execution quality can vary by:

• Speed of execution
• Price improvement (executed better than the NBBO price)
• Payment-for-order-flow (PFOF) disclosure

Read your broker’s execution quality disclosures. If execution transparency matters to you, compare broker performance metrics and trade confirmations.

Settlement, custody and recordkeeping

Settlement timeline

Settlement is the process where cash and securities are exchanged. In many major markets, settlement has moved to shorter cycles:

• U.S. equities: typically settle T+2 (trade date plus two business days), with industry moves toward shorter cycles under discussion.

Settlement affects when proceeds become available for withdrawal and when newly purchased shares are fully credited to your account.

Custody and statements

Brokerages hold assets in custody and provide:

• Periodic account statements (monthly/quarterly)
• Trade confirmations immediately after execution
• Annual tax forms (e.g., Form 1099 in the U.S.) summarizing dividends and sales

Keep records for tax reporting and audit trails.

Transferring and withdrawing shares

If you move brokers, transfer systems (like ACATS in the U.S.) let you move positions in-kind. Transfers can take several business days and may involve fees.

Direct registration: If you want shares registered in your name, request direct registration from the transfer agent or broker. Some brokers charge fees for transferring physical share certificates or direct registration.

Costs, fees and tax considerations

Trading commissions, spreads and other fees

Costs to consider:

• Commissions: Many brokers offer commission-free trades; some still charge per-trade fees for certain markets.
• Bid-ask spread: The difference between buy and sell prices — an implicit trading cost.
• Exchange and clearing fees: Small fees charged by exchanges and clearinghouses.
• Account fees: Inactivity, platform, or custodial fees in some accounts.
• DSP/DRIP fees: Some direct plans charge administrative fees — check plan documents.

Always read the broker’s fee schedule and understand implicit costs like spreads.

Taxes on dividends and capital gains

Basic tax concepts (general information; consult a tax professional for specific advice):

• Capital gains: When you sell a stock for more than you paid, you trigger a capital gain. Short-term gains (held one year or less) are typically taxed at ordinary income rates; long-term gains (more than one year) may receive lower tax rates in many jurisdictions.
• Dividends: Many countries tax dividends; qualified dividends may be taxed at lower rates than ordinary income depending on local rules.

Be aware of holding periods and local tax rules; brokers provide year-end tax documents to assist filing.

Costs of frequent trading and wash-sale rules

Frequent trading can increase transaction costs and complicate tax reporting. In some jurisdictions, rules like the wash-sale rule disallow claiming a tax loss if you buy the same security within a specified window around a sale at a loss. Consult a tax advisor for details relevant to your jurisdiction.

Risks, best practices and investor protections

Key risks of stock investing

• Market risk: Prices can fall across markets and sectors.
• Company-specific risk: Business failures, management errors, or unexpected events can damage a share price.
• Liquidity risk: Thinly traded stocks may be hard to buy or sell without wide price moves.
• Behavioral risks: Emotional trading, overtrading, and chasing headlines can hurt returns.

Be prepared for volatility and set an investment plan aligned with your time horizon and risk tolerance.

Diversification and allocation

Diversification reduces single-stock risk by spreading exposure across many assets. Ways to diversify:

• Buy ETFs or mutual funds covering broad indexes or sectors.
• Allocate across industries, geographies, and asset classes (stocks, bonds, cash).

Position sizing: Limit any single position to a fraction of your portfolio to avoid overconcentration.

Due diligence, fraud awareness and regulatory protections

Do your own due diligence: read filings, check financial statements, and confirm corporate filings with official sources.

Watch out for scams: unsolicited tips, guaranteed returns, or pressure to trade quickly are red flags.

Investor protections vary by jurisdiction. In the U.S., brokers are regulated by agencies such as the SEC; many brokers are members of SIPC, which provides limited protection for custody failures (not protection against market losses). Always confirm the regulatory protections for your broker and account type. For crypto or tokenized stock products, ensure custody and legal structures are understood and compare custodial solutions such as the Bitget Wallet for Web3 assets.

Practical examples and typical workflows

Example — buying a stock using an online broker

A short step-through:

1. Search the ticker symbol for the company you want (confirm market and ticker).
2. Choose "Buy" in the trading interface.
3. Enter quantity (or dollar amount if fractional shares supported).
4. Select order type (market vs. limit) and time-in-force.
5. Preview the estimated cost and fees.
6. Submit the order and receive a trade confirmation when executed.
7. Monitor the position in your portfolio and track news and fundamentals.

This workflow is similar across most discount and full-service platforms; mobile apps often mirror the same steps.

Example — enrolling in a company DRIP or DSP

Steps to enroll in a dividend reinvestment plan or direct purchase plan:

1. Check the company’s investor relations page or transfer agent for DRIP/DSP availability.
2. Request enrollment forms or online registration.
3. Provide account and bank details for recurring purchases or dividend reinvestment.
4. Confirm fees, purchase frequency, and whether fractional shares are permitted.
5. Monitor plan statements and your brokerage account for holdings.

DRIPs compound ownership over time and are useful for long-term investors seeking to reinvest dividends automatically.

Frequently asked questions (FAQ)

Q: Is there a minimum to buy a stock? A: Minimums depend on the share price and whether your broker supports fractional shares. With fractional shares, you may be able to start with a small dollar amount.

Q: How long does it take to receive dividends? A: Dividends are paid on the company’s declared payment date. After payment, the cash typically posts to your brokerage account within one to two business days, depending on the broker and settlement rules.

Q: Can employees buy shares at IPO? A: Employee participation in an IPO depends on company policy and plan terms. Some employees receive restricted stock units (RSUs) or options that convert to shares under specific vesting conditions.

Q: What are fractional shares and are they transferable? A: Fractional shares represent part ownership. Transferability depends on the broker; some brokers do not allow withdrawing fractional pieces to another broker in-kind.

Q: How do I find a company’s ticker symbol? A: Use your broker’s search tool or the company’s investor relations page. Confirm the market (NYSE, NASDAQ) and exact ticker to avoid confusion.

Further reading and authoritative resources

For deeper reading and official guidance, consult:

• Exchange websites (NYSE, NASDAQ) for listing and trading rules.
• Regulator investor education pages (e.g., the SEC’s investor.gov in the U.S.) for fundamentals and protections.
• Broker learning centers for platform-specific tutorials and trade mechanics.

If you need personalized advice, contact licensed financial advisors and tax professionals. This article is educational and not individualized investment advice.

Revision history and notes (Wiki housekeeping)

• Revision cadence: articles are typically reviewed and updated quarterly or as market structure changes.
• Legal & disclaimer: This page is for educational purposes only and does not constitute investment advice. Tax and regulatory rules differ by country — consult a qualified professional for your situation.

Practical reminders and next steps

If you are wondering how do you buy shares of stock in a company and want to act:

• Start with clear goals and a written plan.
• Open a brokerage account that fits your needs; consider Bitget’s platform and Bitget Wallet if you seek integrated multi-asset, Web3-friendly services.
• Use limit orders for price control and keep position sizes reasonable.
• Keep records and consult professionals for tax or complex planning.

Explore Bitget features and educational resources to learn more about trading mechanics and custody options — choose a regulated broker and verify account protections before funding any account.

Reporting note: As of Jan 23, 2026, market coverage by Barchart and Benzinga highlights increased headline-driven volatility and opportunities in seasonal trading patterns, which underscores the importance of disciplined, research-driven approaches rather than reacting to every news event.

Sources and data used for context: recent financial news and market coverage as of Jan 23, 2026 (Barchart/Benzinga). Quantifiable figures referenced in that coverage include example stock ROIs and dividend yields; readers should consult primary filings and exchange disclosures for the latest verified metrics.

Note: This article is educational and neutral in tone. It is not personalized financial advice. For tailored guidance, consult licensed financial or tax professionals in your jurisdiction.