Like most of us, you
have probably imagined buying shares of a company that skyrockets in a couple
of years in value, making you enough money to travel and chill for the rest of
your life. Maybe even GameStop was among your top picks for buying its shares,
or it will be. In reality, investing is a bit more complex than waiting for the
birds flying into your mouth ready roasted, but hey, you have to start
somewhere right?
The good news is that
unlike back in the days, today you can buy shares in companies like GameStop
fully online.
While we do not
specifically advise to buy GameStop shares, this article explains in layman’s
terms how you can buy shares in companies in general, taking GameStop as an
example. Whether your first share to buy should be GameStop or not it’s for you
to decide. We strongly suggest to contact investment advisors as this article
is not meant to be investment advice under any circumstance.
Overview of GameStop
GameStop is a US
Consumer Cyclical company, traded on the NYSE under the GME ticker. It is known
for selling video games, electronics, and accessories, such as controllers or
headsets. If you’d like to buy its stocks you need to find a broker that gives
you access to the NYSE because that’s the main exchange it’s traded on (hang
tight, we’ll get into this in a bit).
All of this doesn’t
mean that GameStop is a good company or a bad one. As part of this example you
might want to get reminded of what you are considering investing in though.
Let’s see the steps
now!
Steps of buying
GameStop shares
Okay so for your own
reasons you have decided you’d like to buy GameStop. That’s a good start. Let’s
see what lies ahead of you before you can officially state that you are a
shareholder of GameStop! The process is rather similar for any company shares
and again, we only take GameStop as an example.
Step 1: find a good
online broker
One of the
characteristics of an online broker is the exchanges they have access to. Not
all brokers allow you to buy shares of GameStop, simply because they don’t have
access to the NYSE. Needless to say, you need a broker that gives you access to
this exchange.
The next important thing with a broker is that it should fit you as well. Not
all brokers allow every citizen to open an account with them; some brokers are
super expensive if you just want to buy a couple of GameStop shares every once
in a while, some brokers can be absolutely free. You can actually get great
recommendations on choosing the right broker using our questionnaire:
When recommending a
broker, we take into account different factors, like the broker’s fees, trading
platform, accessible markets to trade, and how easy it is to open an account.
Safety is also highly important, but since we recommend only safe brokers, you
do not have to worry about it.
Step 2: open your
brokerage account
After finding your
online broker, you need to open an account. This is much like a regular bank
account and opening one is usually a fully online process. At some brokers it’s
as quick as opening a new Gmail account, at some brokers it takes a couple of
days until they do some background check on you. Instead of storing money on it
you will store your shares on this though, so you definitely need this to buy
GameStop shares and to store them.
Step 3: deposit money
to your account
You will pay cash to
buy those GameStop stocks. This cash first needs to be sent (deposited) to your
broker. This is usually super easy and quick, actually even easier than opening
your brokerage account.
The most common way you can deposit your money is bank transfer and using
credit/debit card. At some brokers, you can deposit to your investment account
even from different electronic wallets like Paypal, e.g. at eToro.
Step 4: buy the
GameStop share
You have the account,
the cash, and the share target. The last step is to press the buy button! You
log in to your online brokerage, search for GameStop share, insert the number
of shares you wish to buy, and click buy, which will initiate the purchase of
shares (in trading lingo: execute the buy order).
A couple of hints
around this: when placing an order, you can choose from different order types.
The market order buys at the actual market price, while the limit order allows
you to specify the exact price at which you want to buy the share.
Step 5: review your
GameStop position regularly
You are not finished
after you purchased your GameStop stock. Now it is key to monitor your
investments. This basically means following your investment strategy. If you
bought the GameStop share for holding it for a longer term, you might
participate in the annual meeting and collect all the news and information
about the company.
If you plan to sell it
shortly after you see some increase in the price, you might use different
position management tools. E.g. you can set the target price at which you want
to sell the share with a profit, or use the stop loss to set a price at
which you want to sell the share to avoid further losses.
Now that you have mastered the 5 steps of buying shares, take a moment to look at the top 5 brokers we have selected for you.
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