This page will guide you in the process of trading stocks on the Simulator. If you'd like to learn more about what stocks are, check out our stocks basics tutorial.
1. First, you must know the stock symbol (sometimes called the ticker symbol) for the stock you'd like to trade. These symbols are used to identify the stock of a corporation. They range from one to five letters and are usually similar to the company's name. For example, the ticker symbol of Microsoft is "MSFT" and the ticker symbol of General Electric (known now as GE Aerospace) is "GE". We provide a Symbol Lookup in the Research tab where you can enter a company's name and get the symbol.
2. After you know the ticker symbol, go to the order entry screen by clicking on the 'Trade' tab. You should get a page that looks like the following:
Once you enter your desired ticker symbol, you will see the option to preview the order.
Transaction Types
- Buy and sell is fairly self-explanatory.
- "Sell short" and "buy to cover" are more advanced trading techniques. We're not going to get into it here, but short selling is a way to profit when a stock goes down in value.
Order Types
- A market order is the most common order type. This simply means that you'll buy at whatever the price the stock is currently trading at. The advantage is that it's easier and your order is guaranteed to be filled. For most investors, a market order is all they need. The only problem with market orders is that in a volatile market the price an order is filled at can deviate significantly from the last-traded price.
- A limit order sets the maximum or minimum price at which you are willing to buy or sell. For example, a buy limit order at $10 means that you will pay no more than $10 for the stock. Limit orders allow you to be more precise but this also means that you aren't guaranteed to get your order filled.
- A stop order trades a stock when the price passes through a particular point. The most common usage of this is a "stop-loss order." For example, if you own a stock that is currently at $20 you could set a stop-loss order at $15 in order to limit your loss to around $5. If the stock fell below $15 the stop order is activated and the stock would be sold at market price.
You can learn more about the different order types here.
Symbol, Shares, and Term
The rest of the columns on the order entry screen are easy to understand:
- We've talked about what stocks symbols are, notice how in this example we've entered the ticker for Microsoft.
- The number of shares must be a number greater than 0.
- The term can be either 'Day Order' or 'Good Till Cancelled (GTC)'. This is only valid for limit and stop orders as a market order is always filled right away. Day orders are valid until the end of the current trading day while GTC orders are valid until you cancel them.
3. After you are happy with your order press 'Preview Order' and you'll be taken to a screen that looks like the following:
This screen confirms all the details of your order including the actual price and commission. If everything looks okay, hit 'Submit Order'.
Assuming there are no problems with the trade, you'll be able to see the stock in your portfolio.
Below are all the other articles in this how to guide:
How To Guide: Part 1 - Introduction & User Interface
How To Guide: Part 2 - Purchasing Stocks & Order Confirmation
How To Guide: Part 3 - Portfolio Summary
How To Guide: Part 4 - Ticker Symbols
How To Guide: Part 5 - Diversified Portfolios
How To Guide: Part 6 - Selling Stocks