Estimated reading time: 7 minutes
Great, since the last blog, we assume you have an Interactive Brokers (IBKR) account. If you haven’t, I have covered how to open an account, fund your account and convert those funds in my previous blogs. Do check them out here.
If this is your first time placing a trade, don’t worry, this step-by-step guide will walk you through each step with tips and common mistakes to avoid!
Disclaimer: This is not an investment recommendation. It is for educational purposes only.
TABLE OF CONTENTS
Key Things to Know Before You Buy Your First Stock
- Make sure you have enough funds and converted those funds to your preferred currencies.
- Understanding different order types.
- Be sure to check the market trading hour. Different market has different opening and closing time.
Step-by-step Guide for Placing Order
Step 1: Login to your IBKR account
The first step is simple, log in with your username and password. Depending on which platforms you are using, the screen might look slightly different, but the process is exactly the same.
Step 2: Search for a company stock
Type in the company name or ticker symbol that you would like to buy.
Tips: Many tickers look the same, so remember to double check because you definitely don’t want to end up buying the wrong one. For example, MSFT (Microsoft) and MSFG (MainSource Financial Group)
Step 3: Buy order button
Now, click on the “Buy” button. This step should be similar to all platforms.
Step 4: Edit your “Buy order”
Once you’ve clicked “Buy”, you’ll see an order ticket pop up. This is where you edit your order details.
- Quantity: Choose how you’d like to place your order (click on 1a).
- Shares: Enter the number of shares you want to buy. IBKR supports fractional shares, so you don’t have to buy a whole share. For example, if one share costs $200, you can enter ‘0.5’ for $100 and own half a share. This option works best if you already know how many units you want.
- USD: Enter the amount that you would like to buy (instead of quantity) and IBKR will automatically calculate how many shares or fractional shares that amount equals to. This option is useful if you have a fixed budget.
- Note: The illustration above is based on the Client Portal. If you are using IBKR mobile, do take note that you can only change the quantity using ‘shares’ but not in ‘USD’.
- Order type: Order type sets how to execute your trade and the two common ones are Limit and Market.
- Limit: You set the maximum price you’re willing to pay (You’ll need to enter your limit price in 2a). The order will only execute when it reaches that price, which is why most beginners prefer this option, as it gives more control over unexpected prices.
- Market: Executes immediately at the best price available.
- You can read more about the differences between a limit vs market order here.
- Time-in-force: Time-in-force controls how long your order remains active.
- Day: The order is valid only for the trading day. If it isn’t filled by the end of market closing, it expires automatically. This is recommended for beginners who want a simple “today only” order.
- GTC (Good-Til-Cancelled): The order stays active until it’s filled or you cancel it yourself. IBKR may also cancel the order if you did not log into your account for 90 days or if there is company action such as stock splitting.
- Outside RTH (Regular Trading Hours)
- Normally, trades only happen during regular U.S. market hours. But IBKR gives you the option to place orders in pre-market or after-hours sessions. To do this, just switch “Yes” in 4 or “Fill outside RTH” for IBKR desktop.
- Note: Not all US stocks support Overnight trading. Check for the “Moon” symbol.
Outside RTH is useful if you want to react to major companies’ news earnings release or press conferences after the market closes. Just keep in mind that the exact trading time may shift depending on daylight saving time (DST) as shown in the image.
Step 6: Preview your order details
Click on the “Preview” button to check your order details. If everything is correct, you may click on the “Transmit” button to place your order.
Note: Transmit = Submit buy order
Step 7: Buy order
Click on the “Submit Buy Order “ button.
Well, congrats on your first order!
To check if your order has been filled, simply head to Portfolio > Orders in the menu. IBKR also uses colour code to show the status of each order, so you can quicky see whether it’s filled, pending or cancelled.
Final Thoughts
Overall, I find the whole buying process with IBKR pretty much smooth. If this is your first time, try not to rush, make sure you’ve double checked all of the details from stock selection, order type and time-in-force. You can always click around the platform and get comfortable with the buttons before you start trading. Good luck and all the best!
Share the Wealth
Found this information useful? Share this post with your friends and family to help them stay informed about what’s happening around them. And if you’re not already subscribed, join our community to receive more insightful content directly to your hands.
