4.3 How to trade


What this topic covers:

  1. Understanding the CommSec order pad
  2. Placing BUY and SELL orders
  3. What happens after you place an order


How to place a trade and make your first investment with CommSec


This is what all your learning is leading to: making your first trade. These videos will show you how to place BUY and SELL orders and how to manage your orders once you’ve placed them. For a detailed look at the process, start with an overview of the order pad.


 

The following videos provide a snapshot guide to placing a BUY and SELL order.


 

 

And finally, this video shows you how to manage your orders.

 



What happens once you've made your first trade?



Your trade confirmation

The email from us will contain not only details of your trade but also your contract note – the legal record of your trade.



Settlement

Settlement is a standard process that applies to all Australian sharemarket trades. When you buy or sell securities, there are two key dates:


  • The trade date (known as T) - the date when your order trades on the market.

  • The settlement date (known as T+2) - when money is exchanged for ownership of the investment.


When you buy shares or other securities there must be enough money in your settlement account on the second business day after your order has traded. The second business day is when we'll debit your account to pay for your investment. And when you sell shares, we'll deposit the money into your account on the second business day after the trade.

If you have more than one trade settling on the same day, we’ll just debit or deposit one amount to cover the total. If you place both BUY and SELL orders within the same day (or the following day) we will debit or deposit the difference between the executed trades. This process is known as contra settlement.

After you buy shares, you'll receive a welcome letter from a share registry like Link Market Services or Computershare. Share registries are responsible for shareholder admin and they manage things like dividend payments. The share registry may ask for your Tax File Number (TFN) which you should provide to avoid them withholding tax from your distributions or dividends.

Every month that you buy or sell shares you'll receive a holding statement from the Clearing House Electronic Subregister System (aka CHESS). It’s a system used by the ASX and Chi-X Australia to record ownership of shareholdings. Your CHESS holding statement will list all your investments for the month, so it's a good way to keep track of your portfolio changes.


That’s it for this topic. You’ve now progressed through 4 of the 5 topics on your investment learning journey. Are you ready to tackle the next topic and discover how to manage and analyse your progress? Before you get started, why not complete the quick quiz? 

 



Next Topic: 4.4 Quick Quiz

Disclaimer

CommSec Learn is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Investors should consult a range of resources, and if necessary, seek professional advice, before making investment decisions in regard to their objectives, financial and taxation situations and needs because these have not been taken into account. Any securities or prices used in the examples given are for illustrative purposes only and should not be considered as a recommendation to buy, sell or hold. Past performance is not indicative of future performance. Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 (CommSec) is a wholly owned but non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and a market participant of the ASX & Chi-X Australia, a clearing participant of ASX Clear Pty Limited and a settlement participant of ASX Settlement Pty Limited.

 

 

Disclaimer

This site is directed and available to and for the benefit of Australian residents only. © Commonwealth Securities Limited ABN 60 067 254 399 AFSL 238814 ("CommSec") is a wholly owned, but non guaranteed, subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945 and both entities are incorporated in Australia with limited liability.

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