Note: The broking firm formerly known as ‘TD Waterhouse’ was renamed in Oct ’11 to ‘TD Direct Investing‘.
To demonstrate how simple it is to buy shares online, I have created this quick walkthrough of me making a ‘dummy purchase’ of some shares. I trade using TD Direct Investing ISA, so the user interface will only the be same for TD Direct Investing clients, although the process will be very similar to other platforms.
Step 1: Placing an Order
Hover your mouse over ‘Trading’ in the main menu, and click ‘Place an Order’. You will encounter the following screen:
I select which account I will be holding these shares in (My ISA).
The personal trading level represents the cash available to purchase shares.
I then entered ticker symbol LAND into the stock symbol area and the page updated to provide ‘Real time Quote‘ information. Bid is the price we can sell at, and Offer is the price we can buy at.
I selected ‘Buy‘ and asked for ‘300 shares‘. I could have selected ‘Amount in currency‘ rather than shares, and entered the amount of money I wished to invest instead.
Settlement period is the time it takes for the order to fully clear through the financial system and cash to be transferred to the seller. It is fixed at 3 days and this is unchangeable. From the investors point of view, the order is still executed immediately and you take almost instant ownership of the shares.
Finally I selected ‘Market’ order type, which means the order will execute immediately at the market price. Instead you can ask to only buy if the share drops to a certain price within a time frame, these are called ‘limit’ orders.
Step 2: Confirming the Order
I then clicked ‘Preview Order’ and the following summary appeared:
This screen quotes you the price that TD Waterhouse can actually trade in the market. You will actually notice this is a lower price than the ‘Offer‘ price quoted earlier, this is due to timing differences.
The ‘Total‘ cost stated here includes all costs, including commission, stamp duty and the £1 PMT levy for transactions over £10,000 in size.
You have 15 seconds to confirm the order, so if you are happy with the details you must click ‘Place Order‘ before the counter gets to 0. If you don’t click ‘Place Order‘ in time, the deal will expire and you will be taken back to the order screen. If you click ‘refresh’, the price is updated and you give yourself another 15 second window to confirm.
That’s it! You are proud owner of some shares!
Hover your mouse over ‘Trading‘ in the main menu, and click ‘Order List’ to see the status of your order. If there have been any difficulties, the system will ask you to phone the firm to resolve the issue. After a few minutes the shares should appear in your portfolio screen, although sometimes it may take a little longer for the system to update.
I’ve attached a screenshot of LAND shares I bought a year ago sitting in my portfolio. As you can see, they’ve performed very well over the past few months. This isn’t a recommendation to buy however. Read How to Invest in Shares & Stock Market for tips on how to do your own research!