25 commonly asked questions around Buying & Selling stocks answered

Nick Sundich Nick Sundich, June 22, 2022

The past couple of years have led to a new wave of people investing in stocks for the first time. Data from CommSec showed the number of first-time investors jumped 125% during COVID with 83% of these being millennials, Gen Z and Gen X. Many other platforms saw influxes of users and Investment Trends estimates 435,000 Australians invested for the first time.  

But what does trading stocks involve? How can you make money? When should you buy and sell a stock? And how long should you hold stocks for?  

Stocks Down Under answers 25 commonly asked questions about buying and selling shares. 

 

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Can I buy and sell a stock on the same day? 

Yes, you can buy and sell stocks on the same day provided the market is open. In Australia, the ASX is open between 10am and 4pm Sydney time although other global markets have their own times for trading. Wall Street, for example, trades 9.30am-4pm New York time, while European markets trade from 8.00am to 4pm London time. 

 

Can I buy and sell stocks online? 

Yes, you can buy and sell stocks online. In fact, buying and selling online is the 21st century norm for investors and there is no shortage of online brokers allowing you to trade shares online.  

 

Can I sell and buy the same stock? 

Yes. By buying or selling shares, you are not precluding yourself from taking the opposite action down the track.  

 

Can I sell a stock at a loss and buy back? 

Yes, and this can be a practice to minimise capital gains tax bills. Even if you buy back the same shares immediately after selling them, the selling represents a so-called ‘CGT event’, meaning an incident that gives rise to a Capital Gains Tax (CGT) liability. If you have made a loss, you can use it to offset capital gains elsewhere.  

 

Can you buy and sell the same stock repeatedly? 

You can buy and sell the same stock repeatedly, there is nothing wrong with the practice in and of itself. But repeated engagement of this practice might draw suspicions from regulators of illegal activity such as for market manipulation or insider trading.  

 

Can you buy back stocks after selling them at a profit? 

Yes, you can. But remember, the selling represents a so-called ‘CGT event’, meaning an incident that gives rise to Capital Gains Tax (CGT) liability. This is the case even if you immediately buy the same shares back. So, we would not recommend this. 

 

Can you sell a stock immediately after buying? 

Yes, you can. However, if you engage in this practice repeatedly, it is likely to draw attention from corporate regulators because there are certain offenses (such as market manipulation) that involve this activity. This is not to say everyone who sells a stock immediately after buying is engaging in illegal activity, rather, it can make regulators suspicious. 

 

How do you buy and sell stocks? 

Essentially, you place an order at your broker. Before you buy and sell shares, you should research the company, have confidence that it can grow from its current levels and know just what will propel it to new heights? 

 

How does buying and selling stocks work? 

Essentially, you place an order in your broker according to their instructions. Before you buy and sell shares, you should research your company, have confidence that it can grow from its current levels and know just what will propel it to new heights? 

When you place an order, you can either accept the market price or indicate the price you are willing to accept. You can also make an offer expire at the end of the current trading day or last several weeks.  

 

How fast can you buy and sell stocks? 

It all depends on the speed of your broker and whether or not someone wants to either buy the company you want to sell or sell the stock you want to buy. You can typically buy and sell most liquid company’s shares instantaneously if you are willing to accept the market price. But for smaller, illiquid shares, or if you want a price other than the market price, you will need to wait for an investor willing to trade with you. 

 

How often can you buy and sell the same stock? 

There is no hard and fast limit, but repeated buying and selling of the same shares can make regulators suspect certain illegal activity.  

 

How often should you buy and sell stocks? 

Investors should only buy a company’s shares when they believe it is going to go up and should sell when they believe it is going to go down. Of course, this is easier said than done. Investors should do their own research to determine what will happen to shares they own, and trade accordingly.  

 

How soon can I sell a stock after buying? 

There is no time limit on selling a stock after buying, you can sell straight away. But remember, it is conditional on another investor being willing to buy those shares from you.   

 

How can I buy and sell stocks in Australia? 

Essentially, you place an order in your broker according to their instructions. Before you buy and sell shares, you should research your company, have confidence that it can grow from its current levels and know just what will propel it to new heights? 

In the past, investors could buy and sell shares through brokers. Today, several dozen trading platforms act as brokers. These include platforms run by major financial institutions, with the most popular being CommSec – which is run by the Commonwealth Bank – and new upstarts including Stake, etoro and CMC.  

 

How can I make money buying and selling stocks? 

You make money by selling shares at a higher price than what you paid for them. In other words, ‘Buy low, sell high’.  

 

Is buying and selling stocks profitable? 

If you sell shares higher than what you buy them at, then it is profitable. But if you sell shares lower than what you bought them at, it is not profitable.  

 

Is it bad to buy and sell stocks quickly? 

Not in and of itself. But repeated engagement can draw attention to yourself from regulators. And furthermore, by selling a stock quickly, you might be missing out on potential upside gains that may come in the longer term.   

 

Is it better to buy and sell stocks or hold them? 

Ultimately, it is best to buy shares you are confident will go up and hold them until you believe they have reached their maximum share price. And it is best to sell shares you think will go down.  

 

Is it illegal to buy and sell stocks quickly? 

Not in and of itself. But repeated engagement can draw attention to yourself from regulators. And furthermore, by selling a stock quickly, you might be missing out on potential upside gains that may come in the longer term.   

 

What does buy hold sell mean in stocks? 

Buy means purchasing shares from someone else on the stock market. Selling means disposing of them to someone else. And hold means not buying or selling shares you currently have. 

 

What is the buy price and sell price in the stock market? 

The buy price is the price at which you purchase a stock at. The sell price is the price you sell a stock at.  

 

What is buying and selling in the stock market? 

Buying means purchasing stocks from someone else on market. Selling means disposing of them to someone else. 

 

Where can I buy and sell stocks? 

There are dozens of online brokers that allow you to buy and sell shares. Investors should consider how easy they are to use and what they will have to pay to trade stocks.  

 

Who buys stocks when you sell them? 

Typically, it is other investors that buy stocks from you. However, in some circumstances, companies opt to buy back shares from investors.  

 

No time to do stock research, but you still want to invest?
 
Stocks Down Under Concierge gives you timely BUY and SELL alerts on ASX-listed stocks!

 

GET A 3-MONTH FREE TRIAL TO CONCIERGE TODAY

 

No credit card needed and the trial expires automatically.

 

25 commonly asked questions around Buying & Selling stocks answered 1

 

 

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