Buying and Selling Stocks

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Video Transcript:

Hello, traders. Welcome to the Thinkorswim [SP] tutorial. On the fourth module, trading. In this lesson, I’m going to teach you how to buy, how to sell, and how to short sell stock on the Thinkorswim platform.

Stock trading on thinkorswim

Now you can see that we are looking at the Apple chart on the [inaudible 00:00:19] only on today’s data. This really doesn’t matter, but I’m going to take an overall look at what has been going on in order to take the trade. Now, if you want to buy or sell short on any company that is publicly traded, here’s show it’s done. You go to the trade chart and first of all, what you need to do is type on the other line product that you want to buy or to sell, and in this case, it’s Apple. If you want to buy just click “Buy stock” of Apple. Just click on the “Ask price,” and this will bring an automatic buy order for 100 shares. If you want to buy more than 100 shares, just modify this and go ahead and you can choose from a limit order or stop order or a market order. We are going to choose to buy 1,000 shares of Apple. No, we’re going to choose to buy 500 shares of Apple at the current market price.

Stock trading on TOS Platform

Once it’s done, you click “Confirm” and “Send.” The order confirmation window should rapidly pop out. Just review your trade and send it to the exchange. Now we are just waiting for our order to be filled. As you can see, we have been filled and you can go to the monitor tab. And right now, we are long 500 shares of Apple and we are down $4, but that doesn’t matter actually. What really matters is learning how to buy and sell stock.

Now, if you want to close this position, of course, you have to sell the shares back to the market. So you need to go to the trade menu and click on the “Bid price to generate a sell order.” Now the sell order has been generated right here and you just need to modify it to 500 shares of Apple. And, of course, if you want to close it right now, you have to turn this order into a market order, confirm, and send it.

This has closed our long trade on Apple and as you can see right here, we lost $45 in it. But it doesn’t matter because in this lesson we are just learning how to buy and sell stock with the Thinkorswim platform. But what about selling a stock you don’t own? That is called short selling and short selling is very easy with the Thinkorswim platform. If you have no position in Apple, as you can see we have no position in Apple, but you want to short sell this stock. You can do it by clicking on the bid side on the bid price and we want to change the position effect from auto to open. When you change it to open, it means that you are short selling, which means that you are borrowing 500 shares in order for you to be able to sell them because you don’t owe them. We need to confirm and send this order. The order has been sent.

As you can see, on the monitor tab, we are short 100 shares of Apple. And this is how you are going to be buying and selling back stock and how you are going be short selling stock with the Thinkorswim platform.


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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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