(Tutorial) How do I start trading stocks?
April 15, 2008
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).
Looking for online stock brokers in the Philippines? Read here.
- Stock Trading 101: Guide and Tutorial to Stocks
- Stock Discussion of all PSE Listed Firms
- Discussion Forum on Stock Trading
Note: This is the sixth of several parts of Pinoy Money Talk’s primer on stock trading and investing, with a focus on investing in the Philippine stock market.
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