How to Bid on the Stock Market
- 1). Choose a ticker symbol that interests you and that you would like to buy if the price is right. The stock market does not limit you to just corporate stocks. You can also bid on the purchase of gold, foreign stock market indexes or individual sectors through the use of exchange-traded funds and also government bonds.
- 2). Enter the ticker symbol for your desired investment instrument into your stock broker's trading platform, if it is an electronic system or call your broker to place an order.
- 3). Place a "limit" order for your desired ticker at your bid price. When you make a bid, you are advertising to the market the price you are willing to pay for the instrument. A limit order locks in a maximum price you will pay and is the stock market's equivalent to raising a bid sign at a live auction. As part of your limit order, you must include the total number of shares you wish to purchase.
- 4). Wait for your order to be executed. If the stock market trades your desired instrument at a price that meets the criteria of your bid, your limit order will "fill" and you will now own the shares. However, the key distinction of a limit order is that execution is not guaranteed. Thus, if other bidders are willing to pay more than your bid, the market will likely not trade down to your price, and your order will sit without execution.
- 5). Cancel the limit order at any time you choose if you either change your mind, want to enter a new bid, or accept that the market is unlikely to trade at your bid price so you get a fill.
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