How to Buy Shares?

1
How to buy shares on ASX? The stock market has a
complex mechanism of buying and selling of listed
securities. However, in order to transact in
these securities, its not a must for an ordinary
investorto know all the intricacies of how this
mechanism works. However, he must know the
front-end procedure to buy or sell these
securities in order to transact them in an
orderly manner.
Image Source Copyright 2020 Kalkine
Media Given below is an orderly procedure
following which an investor can buy/sell shares
on the ASX. 1. Choose a broker The very first
thing one needs to know is that any individual
cannot transact directly with a
recognisedexchange such as ASX. In order to make
a purchase or sell existing securities, one
needs to place these orders via a stockbroker
that has to be affiliated with the stock exchange
of interest. This broker accepts buy/sell orders
from its clients (investors/traders) and routes
these orders to the exchange where they are
finally executed. Some of the renowned brokers in
Australia are Bell Direct, CanstarCommSec, etc.
While choosing a stockbroker, an investor needs
to keep a few points in mind the number of
affiliated exchanges with the broker, the
commission charged, technological
infrastructure, etc. Read More 5 Tips to select
the right Stock Broker
2

• Open an account with the broker
• To open a brokerage account in Australia, one
  needs to be at least 18 years old and an
• Australian resident. To sign up, youll be asked
  to submit a few documents such as your tax file
  number (TFN), bank account details, proof of ID,
  etc.
• In todays fast-paced world, it usually takes
  only a few hours to be approved for the account
• opening. Also, one could be asked to deposit a
  minimum sum to open the account, which varies
  from broker to broker.
• Once the account has been opened after fulfilling
  all the formalities, an investor can start
• planning to buy securities of his interest.
• Selection of securities to be bought
• As the account has been opened now, an investor
  can start planning which securities/shares to
  buy. He may use fundamental analysis or technical
  analysis as per his knowledge. Whatever may be
  the approach, it is recommended to have a medium-
  to long-term view about the shares and very
  short-term trading. Also, intraday trading should
  be avoided for a newbie.
• Some stockbrokers also provide research-based
  recommendations for their clients which could
• also be looked upon.However, one thing to note is
  that these recommendations could be free, but
  the risk is borne completely by investors and
  therefore, an investor must not miss out on due
  diligence.
• There are two categories of brokers a
  full-service broker such as Morgans and online
  brokers such as Bell Direct.
• Order placement
• Once the stock has been selected, the investor
  now needs to place the order with the broker to
  buy those shares. The broker then routes these
  orders to the respective stock exchange, where
• they are electronically matched between buyers
  and sellers to transact at their respective
  prices.
• There are different types of orders with
  different features to facilitate some conditional
  orders.

3
The date of trade execution is called T Day and
the following days are called T1 and T2
which are the days when the clearing and
settlement takes place. On T2 day, that is two
days after the transaction, an investors money
is debited, and shares are credited (in case of a
buyer) vice versa in the case of a seller. In
a nutshell, an investor does not receive shares
immediately after the transaction, but two days
after the successful transaction. Read More
Understanding The Role Of A Stock
Broker? Disclaimer The principal purpose of the
Content is to educate and inform. The Content
does not contain or imply any recommendation or
opinion intended to influence your financial
decisions and must not be relied upon by you as
such. Kalkine Media is neither licensed nor
qualified to provide investment advice through
this platform. Users should make their own
enquiries about any investments and Kalkine Media
strongly suggests the users to seek advice from a
financial adviser, stockbroker or other
professional