Stocks Basics 5: How do I start trading stocks?

I’m ready to start trading stocks, what do I do?

You sure you’re all set? Have you reviewed our stock trading tutorial about the types of stocks and other securities being traded, how profits are made, how much you need to trade stocks, and what types of orders you can make?

If you did and are really ready to go, then read on.

Step 1. To be able to participate in the stock market, you need a stockbroker to buy and sell shares of stocks on your behalf. A stockbroker is a person or a corporation authorized and licensed by the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) to trade securities. For a complete list and information about licensed brokers in the Philippines, contact the PSE.

Step 2. Apply for an account with your chosen broker. Normally, you will need to fill up a Reference Card and submit identification papers for verification. Once approved, you will be assigned a trader or agent to assist you in buying or selling stocks. You will also need to fund your account to be able to start trading.

Step 3. Communicate and discuss with your trader your stock order, then wait for him or her to successfully execute it.

Step 4. If buying stocks, you need to pay the total transaction amount within the settlement date  (3 days from date of transaction). If selling, you need to deliver the Stock Certificate, if you are the one keeping it, to your broker.

Step 5. Three (3) days after the transaction, you will receive from your broker either the proceeds of the sale or proof of ownership of the stocks you bought (confirmation receipt and invoice).

Online Stock Trading

You may also choose to open a trading account with an online broker. Normally, you will not anymore be assigned a trader and, instead, you will do the trading yourself with the broker’s online system helping you execute your order.

Here’s a list of licensed online brokers in the Philippines. You can also visit the related thread discussion about these brokers in the PMT Forum.

List of Online Stockbrokers in the Philippines

AB Capital Securities, Inc.
Website: www.abcapitalonline.com
Forum Discussion: Online PSE Stock Brokers

Accord Capital Equities Corporation
Website: www.philstocks.ph
Forum Discussion: Online Broker: PhilStocks.ph

BPI Securities Corporation
Website: www.bpitrade.com
Forum Discussion: Online Broker: BPI Trade

CitiSecurities, Inc.
Website: www.citiseconline.com
Forum Discussion: Online Broker: CitisecOnline

Diversified Securities, Inc.
Website: www.dfnn.com
Forum Discussion: Online PSE Stock Brokers

F. Yap Securities, Inc.
Website: www.2tradeasia.com
Forum Discussion: Online PSE Stock Brokers

First Metro Securities Brokerage Corporation
Website: www.firstmetrosec.com.ph
Forum Discussion: Online Broker: First Metro Securities

RCBC Securities, Inc.
Website: www.rcbcsec.com
Forum Discussion: Online Broker: RCBC EZTrade

Other references:

• Stock Trading 101: Guide and Tutorial to Stocks
  
• Other stock trading articles in PMT
• Discussion Forum on Stock Trading

Note: This is the fifth of several parts of Pinoy Money Talk’s primer on how to earn from trading and investing in the stock market, particularly the Philippine stock market.

Article source: Philippine Stock Exchange. Photo Credits: FreeImages.co.uk

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