There are dozens of platforms available to Australian investors – some of them are offered by the Big Four and other major banks, while others are provided by specialist sharebrokers.
While it might be more convenient to stick with your current bank, you could lose out in terms of brokerage fees. Instead, compare the features and fees of a number of platforms before choosing the right one for you.
Finder survey: What do Australians use to invest in the stock market?
Response
An online broker or share trading platform
84.13%
Micro-investment app
8.08%
Managed fund
7.19%
Full-service stock broker
6.29%
Other
4.19%
Robo-advisor
2.99%
Source: Finder survey by Pure Profile of 1145 Australians, December 2023
Step 2: Sign up for an account
Once you've chosen a platform, you'll need to register for an account. This step is usually free, but keep in mind that some providers may charge subscription fees or ongoing fees for features such as market research. You might be asked to deposit a certain amount when you sign up or after your first order.
Either way, the registration process takes place online. If you're a new customer, you'll need to provide your basic information, including the following:
Your name, address, date of birth and contact details
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Step 3: Choose the shares you want to buy
You may have already decided what shares you want to buy, but if not, now is the time to start researching stocks that match your investment goals.
Some brokers will give you access to a wide range of market research, analyses and even trading recommendations through your platform, so use this information to help make an informed decision.
You’ll also need to consider the number of shares you want to buy.
This will depend on your budget and investment goals, but keep in mind that unless you already own shares in a company, the minimum amount of shares you can buy in Australia via the ASX is $500. So if company XYZ is valued at $2 a share, you’ll need to buy at least 250 shares. This is known as a parcel.
It’s also worth pointing out that larger purchases may incur higher fees or involve different fee structures depending on the trade.
Roger Montgomery CIO, Montgomery Investment Management
Only invest in quality companies. To identify a quality company search for a sustainably high rate of return on equity. High rates of returns on equity drive better long-term returns for investors in those companies. A company that can sustain such returns usually has a sustainable competitive advantage.
Market orders. You place a market order when you want to buy a share immediately at the best price currently available.
Limit orders. Placing a limit order allows you to set a maximum purchase price for your buy order. If that price becomes available within your specified time, your trade will be executed.
Depending on the platform you choose, you may also be able to take advantage of a range of conditional orders that allow you to take advantage of market opportunities.
For example, you can set a "trailing buy order" to purchase a stock if the price dips temporarily. For instance, you could set a trailing price trigger of $40 with a stop value of 5%. This means your purchase order only goes through once the stock falls to $40 and then rises by 5% to $42.
IG Share Trading – limit order example. Image: Supplied
Once you’ve entered all the specifics of your transaction, you’ll get a chance to review all those details before placing your buy order.
What are bid, offer and last prices?
Some brokers display the "bid", "offer" (or ask) and "last" price of stocks. Think of these as similar to auction prices, where buyers and sellers of stocks are offering their best prices.
A bid price is the highest price any trader is offering to buy a company’s stock at that moment and the ask or offer price is the lowest price any seller is willing to accept. The last price is the last price bidders agreed upon.
When you set a limit order to purchase or sell a stock, you're creating a new "bid" or "offer" price.
Although the last price is the stock’s most recent price, it’s not necessarily what you can expect to pay if you make a market order. Instead, you’ll be paying the latest bid price and you’ll get the ask price when you sell.
Step 5: Pay for the transaction
You'll need to have sufficient funds in your online share trading account to cover the cost of the transaction, including the brokerage fees that apply.
In most cases, you can fund your account using a bank transfer, BPAY, credit card or debit card.
The trade settlement period on the ASX and Chi-X is 2 business days (commonly referred to as T+2), which means your account will be charged 2 days after you've bought the shares.
If you don't have enough funds in your account by the time you're charged, you'll be hit with a hefty late fee – typically around $100.
Bonus: Monitor the performance of your shares
After you've bought your shares, you'll need to monitor their performance in regard to your investment plan.
However, the frequency with which you monitor them will depend on your strategy.
For example, if you have a long-term investment strategy, you may only check in and see how your shares are performing every month. If you have a medium-term strategy, it may be a good idea to check each night or each week.
Whichever option you choose, you can review the performance of your investments by logging in to your trading account.
What do you need to look out for?
Brokerage fees. This is the fee that applies to each buy or sell transaction. Remember to find a low-cost option as you don't want your returns eaten away by fees. Depending on the platform you choose and the size of your transaction, this could be a flat fee or a percentage of the total transaction cost.
Other fees. Brokers can charge all kinds of additional fees to use their platform. Some of the most common include an inactivity fee, subscription fee and foreign exchange fee.
What you can trade. Some platforms offer access to the ASX only, while others also allow you to trade on stock exchanges around the world.
Ease of use. Consider how easy each platform is for the type of trading you want to perform. Most providers give you the option of a free demo account for a short period so you can trial the features they offer.
Who the platform is suited for. Some share trading platforms are designed with casual investors in mind, while others are more suited to active and experienced traders.
Customer support. How easy is it to get in touch with the provider if you ever have any issues? Is its customer service team based locally in Australia?
Share prices range from less than 1 cent to thousands of dollars per stock. However, there are some rules around how much you need to invest.
There are 2 share trading models: CHESS-sponsored or custodian. If you sign up with a CHESS-sponsored broker, you will have to pay more in fees and higher minimum deposits, but it has the advantage of the shares being in your name. This means in the unlikely case of the broker going under, it is easier for you to get your shares back.
The custodian model means that shares are in the name of the broker. This means the broker is the legal owner and you are the beneficial owner of the shares. On the plus side, under this model, you can trade for less and in some cases buy fractional shares. On the downside, if the broker runs, you have less direct control over your investments and holdings. It's worth pointing out that most of the US brokers run on a custodian model.
Minimum investment
In Australia, there's generally a minimum $500 investment for every new ASX company you invest in if you choose a CHESS-sponsored model. So if BHP has a share price of $50, you'd need to buy at least 10 shares of BHP stock if it's your first time buying.
If you chose the custodian model, your minimum investment can be as low as 1 cent. For example, you can invest as little as a few cents into US stocks even if it's your first time buying. Some brokers also allow fractional investing where you can buy in fractions rather than whole stocks. So, say Facebook is priced at $200 a share – instead of investing $200, you could buy one-tenth of a share for $20.
Broker fees
The other main cost you need to think about is the brokerage or commission fee. This is the fee charged by your broker or share trading platform every time you buy or sell stocks. Brokerage fees are around $3–$30 on most share trading platforms under a CHESS model – sometimes called "discount brokers" – and anywhere from $50–$150 for full-service brokers. Some providers offer $0 brokerage under a custodian model.
However, watch out for other fees charged by brokers including the currency conversion fee (for foreign stocks), account fees, custody fees (for US stocks) and inactivity fees. These are important considerations since any fees you pay your broker will reduce your earnings and impact how much you invest per trade.
Will your profits cover the fees?
Say you invest $100 in Netflix stock with a broker fee of $10 a trade, a custody fee of 0.1% and an annual account fee of $50. If you bought no other stocks, you would need Netflix's stock price to rise by at least 71% in order to cover the fees you paid ($20 to buy and sell + $1 custody fee + $50 account fee). But if you'd invested $5,000, you'd only need its price to rise by 1.42%.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Tips when buying shares in Australia
If you want to get more out of your online share trading, try to keep the following tips in mind:
Do your homework. Making informed trading decisions is crucial to the success of your investments. Research the financial health and growth prospects of companies by poring over annual reports, keeping an eye out for company alerts, reading share prospectuses and accessing research reports.
Stay up to date with the Australian economy. Keep an eye on the health of the Australian economy, Reserve Bank interest rate decisions, government policy changes, levels of investor confidence, exchange rates and the performance of share markets in Australia and overseas. All of these can influence whether it's a good time for you to invest.
Start with blue chip companies. One of the safest options for anyone starting out in the share market is to invest in blue-chip companies. These are Australia’s top 50 companies, as listed on the S&P/ASX 50, and are typically well-established companies. They usually offer the best chance for minimising your risk and providing steady returns.
What about speculative shares? Speculative companies are not in the top 100 Australian companies and have a shorter history of doing business. Some investors are attracted to buying shares in these companies because they offer the potential for large returns, but be aware that they also have the potential to suffer large losses.
Buy what you know. Rather than diving in at the deep end and investing in a company that operates in a field you have little or no understanding of, start with industries and businesses you have some sort of background knowledge of.
Diversify. If you want to minimise your exposure to risk, diversify your portfolio across a range of different industries. If you buy shares across 5 or 6 industries instead of just 1 or 2, you can be better protected against losses if 1 particular industry experiences a sharp downturn.
Risks of online share trading
Before you start buying and selling stocks like you’re Gordon Gekko, make sure you’re aware of all the risks involved, including the following:
Financial losses. A company’s share price can fall dramatically and even drop as far as zero. This can mean significant financial losses for investors.
Last in line. Shareholders are usually the last in line to be paid when a company goes broke. When this happens, there’s a definite chance that you won’t get your money back.
Stress. The share market fluctuates on a daily basis, which can cause plenty of stress for investors. If you can’t handle the ups and downs, you may be better off looking for a safer and steadier investment option.
Unexpected problems. Even if you do an enormous amount of thorough research into a particular company, it’s simply not possible to predict the future. Natural disasters, terrorist attacks, bad company news and even changes in government policy can all occur unexpectedly and adversely affect the price of shares.
Lack of expertise. While investing in the share market sounds quite easy in theory, it can get quite complicated if you don’t know what you’re doing. First-time investors should be wary of getting ahead of themselves.
Getting in over your head. A final word of warning if you’re thinking of investing in shares: Don’t bite off more than you can chew. Make sure to use your common sense and take a cautious approach – good advice no matter whether you’re planning on investing in shares, property or anything else.
Watch: How to buy shares in Australia
Frequently asked questions about buying shares online in Australia
A share is a portion of equity or ownership in a company. Shares are most likely listed on a stock exchange, which allows you to trade them as required. Shareholders can profit from a company in 2 ways, share price appreciation and dividend payments.
Over a long period, investing in shares is a great way to build your wealth.
The ASX 200, or the 200 largest companies, has returned shareholders 9% over the last 30 years according to vanguard. While this doesn't mean you'll receive 9% every year (some you'll be down, others up), the share market generally trades up. Of course, if you invest in stocks that fall in value you will underperform this average. As such, you should do your research before buying any shares.
This will depend on your brokerage platform. Some platforms will allow you to purchase a wide variety of exchange-listed shares and some will even allow you to purchase international shares. Research the different share trading platforms to see which stocks each provider allows you to buy and sell.
As mentioned above, if you don’t already own stocks in a company, you’ll be required to purchase over $500 worth during your first trade. Once you own stocks, you can buy further stocks with no minimum.
The maximum value of shares you can buy online will again depend on your brokerage platform. Some platforms will have no maximum amount but will require you to have the necessary funds for your purchase in your trading account.
The time it will take for your buy or sell order to go through will depend on whether you lodge your order at market or at limit. For example, if you’re buying shares at market value, the order will be placed as soon as possible and the shares purchased at the best price available at the time. However, if you place your order at limit, you can stipulate the maximum price you are willing to pay and how long you will wait for the right market conditions to arise.
If you’re lodging a market order, your brokerage platform will most likely provide you with the opportunity to review and modify your order before submitting it. Once it has been submitted, it will be processed as soon as possible.
If you decide to place a limit order and it has not yet been executed, you will be able to amend or even cancel the transaction.
Once you have purchased shares in a company, you own a small portion of that company. Your on-paper value will change as shares rise and fall based on the market and the businesses' results. You will receive updates at least twice a year as businesses release earnings. It’s up to you to monitor the performance of your shares in line with your investment strategy and decide whether to sell, hold or buy more shares.
A marketable parcel is the distinct number of shares of a particular company you purchase. For an ASX-listed company, a marketable parcel of shares will have a minimum value of $500. Sometimes the share price falls and shareholders find that the value drops below $500. When this happens, it is called an unmarketable parcel. This may be difficult and expensive to sell.
One option for those who have little money is to start investing through micro-investment apps or through fractional shares. Micro-investing lets you round up transactions and set up smaller weekly deposits, with some providers allowing you to get cash back on your shopping. These apps will then invest your money into index or exchange-traded funds.
Your other option is to look into fractional shares. Some brokers will let you buy a portion of shares instead of having to save enough to buy a full share.
While both of these strategies have drawbacks, they can help you get started investing with little money.
If you want to invest in American stocks from Australia, you'll need to find a broker that allows you to buy US shares. Once you have found a broker, you'll need to fill out your basic information and provide some proof of identification.
If you're looking to buy shares in Chinese stocks, you'll need a brokerage account that allows you to access the right stock exchanges. However, it can be tricky to trade on Chinese stock exchanges directly and in many instances, it is easier to invest in Chinese companies that are listed on other exchanges.
Chinese stocks are in 3 categories:
Chinese A stocks: These are listed on the Shanghai or Shenzhen stock exchange, are traded in local currencies and are usually exclusive to Chinese investors except for foreigners with a special licence.
Chinese B stocks: These are stocks of Chinese companies listed on the Shanghai or Shenzhen stock exchange and can be traded by international investors. But with more access to A stocks in recent years, these shares are losing some of their liquidity.
Hong Kong H stocks: These are stocks that are on the Hong Kong exchange, and you'll need to transfer your money to Hong Kong dollars before trading. This market is open to foreign investors.
Many Chinese stocks are also listed on overseas markets such as the US and Australia. These include Alibaba, Baidu and NIO. In this case, you need to sign up to a broker with access to those markets.
In order to buy gold stocks, you'll need to find companies that mine gold. After that, you'll need to sign up to a broker and begin trading.
While you won't directly be exposed to the gold price, the miners themselves are pretty closely aligned to the gold price. This goes without saying, but the higher the price of gold, the better it is for gold miners and vice versa.
Alternatively, you can choose to invest in gold ETFs that are also traded on the stock exchange. These are either physically backed by gold or trade futures contracts.
Finally, if neither of these options appeals to you and you would like to own gold you can buy gold bullion or even jewellery.
You can start investing in Australian shares from as little as $500 if they are CHESS-sponsored and as little as $10 at a time into US stocks – depending on your online broker. If you choose to have a custodian model of ownership, you start buying Australian shares for even less.
Regardless of what or where you choose to invest, you'll need to follow the same steps. You will need to research businesses that you would like to buy, sign up to a broker and purchase the shares.
Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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Hi,
i hope u doing very well
actually i want to start share market as my side husstle
as i wanted to do this for long time but now i am capable to do thing my own can u pls guide me
from where i can start from scratch.
Thanks
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Hi,
i hope u doing very well
actually i want to start share market as my side husstle
as i wanted to do this for long time but now i am capable to do thing my own can u pls guide me
from where i can start from scratch.
Thanks
Hi Guarev,
This beginners guide is a great place to start:
https://www.finder.com.au/invest-in-stocks