Truly, buying or selling shares, beyond the analytics and decision-making process, becomes pretty easy. That's if you are familiar with the process. For somebody who isn't, it could sound scary, which may be a cause not to take action. So, let's demystify that, short and quick. It is easy to buy stocks. When you want to sell too, the process is uncomplicated. If you have any challenge at all, it is with how to decide which stock to buy or if and when to sell. Even these shouldn't prove herculean, because there are people who can advise you, either privately or professionally. So, there is nothing really stopping you!
Buying from the Primary Market
For more on what the primary market is, read this article. Simply put, it's the market for fresh issues. When a company is in the market to raise money through a fresh issue, there are receiving agents appointed to the issue, usually banks and stockbrokers. Applications will be returned through these agents and the application forms are usually obtainable from them (these days, you may have a chance to download it online too). To buy is simple: just obtain a form, complete it (easy process), attach your payment and return to any of the receiving agents. The agents often apply their official stamp to the form they give you, just to compel you to return it through them (they earn a commission for that). If you already have a stockbroker, this is more likely to be processed through him. So, if you hear a company is selling shares and you want to buy, it's easy, don't hesitate. Simply walk to any bank or stockbroker and you will get a form, most of the time. Warning: be careful each time with your signature; you will need to sign it when you want to sell and an irregular signature could pose some headache you won't enjoy. Note: there is no primary market sale.
Buying from the Secondary Market
For the secondary market (read more on the secondary market) buying isn't complicated too. To buy, get to your stockbroker with an instruction (learn to put business transactions, including stock orders, into writing), indicating what stocks you want. Complete a share transfer form for each stock, provide your money and your part is done. Five minutes' job! There again, remember you will sign the exact same signature, when you want to sell.
Selling Your Stock in the Secondary Market
The first thing to note is that it's only in the secondary market that you will sell your stock. This too, has to be done through a stockbroker. If you already have your stock in a CSCS account, the process is easy and quick, unless there is no demand for the stock. To sell, simply provide the instruction to your stockbroker, complete the share transfer form, making sure your signature is regular, and your part is done. Your stockbroker will do the rest. If there is demand for the stock, it could be sold in the next trading session. Once sold, you should have your money on the fourth day: t (transaction date) + 3.
When your shares are not in a CSCS account, the process is not different, except that your certificate has to first go for verification by the registrar, a process that could throw up delays. If you need money urgently, this could throw a spanner into your wheels, a good reason to always have your stocks in a CSCS account. All the same, all you need to do is to forward your certificate(s) to your broker, sign the transfer form, give him a sale order and sit back for your money. That easy!
How do you know at what price your share is actually bought or sold? Your stockbroker will advice you when the transaction is completed. This is done by means of a contract note which states the details of the transaction. Better still (that's if you have any doubt), you can obtain a report directly from the CSCS which shows you, conclusively, at what price your specific transaction was done. Is this important? Sometimes. As you possibly know, prices move from day to day and even at various times in a particular day. The differences from one day or point in a day to another could mean a lot of money, depending on transaction volume. Since it's only the closing price on a day that gets widely reported, you may never know at what exact price your transaction was actually done. Often you won't bother to know, but if you have to, it only takes going to the CSCS to secure the relevant transaction report.
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