Shares in ASX-listed companies are traded electronically, and can only be bought and sold through an ASX participant broker.
You need to provide certain information to your broker when you direct them to buy or sell shares on your behalf (which is called ‘placing an order’).
The trading process
Orders to buy and sell shares are entered into our trading platform by designated operators within broking firms.
These buy and sell orders are matched with each other. Orders are generally matched according to price and in the same sequence they were entered into the platform.
A trade occurs whenever a buy order is matched with a sell order. Following this, you will receive a confirmation that your trade has occurred. If you have bought shares, you will need to pay for the shares you have purchased within three days of your broker executing your order.
Placing an order
When you place an order to buy or sell shares, you should agree with your broker what price you will accept.
Choosing a broker
Different brokers provide different services and levels of service.
Full service brokers offer advice on buying and selling securities, make recommendations, provide research and compile tailored investment plans. They typically charge a higher brokerage fee.
Execution only brokers do not offer recommendations or advice, but their brokerage fees tend to be lower. This is an attractive option for investors who are confident in their sharemarket knowledge and trading decisions. They are typically either internet- or telephone-based.
You can also buy shares from a company itself when shares are offered to the public for the first time through an initial public offer (IPO), or float. These shares can either be purchased directly from the company or via a broker.