The first thing you need to do is have an understanding of stocks and the stock market. A stock certificate is a share of ownership in the company. It is the smallest unit of ownership that you can have. If you own a share of stock in a company you are actually part owner of that company.

There are two types of stocks. There are common stock which represents a majority of stock held by the public. If you own common stock you have voting rights along with the right to share in dividends. The other type of stock is preferred stock. Actually preferred stock gives fewer rights than common stock except in one important area and that is dividends. The most part companies that issue preferred stocks usually pay consistent dividends. Investors buy preferrsed stocks for current income from the dividends.

Most people buy stock in the stock market through a stock broker. One of the most popular ways to buy stocks is now through Internet online stockbrokers. This is also one of the cheapest ways to get started. The average commission charged by an online stock broker is about $20. This is significantly less than traditional brokers charge in the past. The reason brokers charged more the past was they would often provide guidance and stock decisions. Most people now do their own research.

Buying and selling stocks is pretty much like any other purchase except there sometimes a lot of haggling. Let's say a stock has a market value of $50. If you want to buy this stock you will also need to find out what the asking price is. This is often called “the ask.” The ask is the price that someone is willing to sell the stock for. This price might be the same as the market value but it also may be a few cents higher.

In order to sell stock you'll need to find out the bidding price is. This is the price that someone is willing to pay to buy the stock from you.

While it is true that you cannot always buy a stock for the current market value or sell for the same, there is usually not a large difference between the market value and the asking or bid price. This is especially true of stocks that are traded often on the market.

Once you decide what stock you want to buy and have determined an asking price you are willing to pay, then you simply tell the broker how many shares you would like to buy and the broker buys the stock for you.

Buying and selling stocks online is that easy. Do a little research into the different online brokage firms and choose one that you feel comfortable with. You will soon be an expert stock trader.