How do I start online trading?

You can start online trading by opening an online stock trading account. Once the account is opened, transfer the amount of money you plan to trade into the account. Once in place, that money can be used to buy and sell shares.

How much money do I need for stock trading?

In terms of how much money you need for stock trading, it's not as much as you might think. Some online trading platforms will let you invest as little as £25 a month. You could start by setting aside a few hundred pounds for trading, then gradually increase how much you invest as you improve your knowledge and gain better insights into the market. As your profits grow, so too can your investments, but remember there are no guarantees, and your investments can go down as well as up.

Is online stock trading safe and secure?

Online stock trading is safe and secure if you use a regulated stock trading platform. But that doesn't take away from the fact that stock trading is an inherently risky activity. That’s why you should not trade with more money than you are willing to lose. It’s also important to educate yourself about trading by reading books and news articles to increase your knowledge.

Can you buy a single share of stock?

Yes, you can buy a single share of stock. In addition to buying just one share of stock, you can also purchase a piece of a single share – in other words, fractions of shares.

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With online stock trading you have more control over which companies you invest in and when to buy or sell a given stock.

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Your investments are not guaranteed: Shares can fall in value, as well as rise, and you may not get back the full amount you put in.

What is online stock trading?What is a share?How stock prices change How to trade stocks and shares What to consider before trading stocks Golden rules of stock trading Jargon buster FAQs

What is online stock trading?

Online stock trading is often referred to as "share dealing" or "share trading". Both terms translate to the buying and selling of shares in public limited companies (PLCs), which are listed on the stock exchange.

Even though interest rates are now higher than the historical lows during the pandemic, the return on investment on stocks and shares almost always outpaces what most savings accounts offer, but as always that comes with risk attached.

% of UK shares owned by UK residents^[1]

11.6%

What is a share?

A share is a unit of ownership in a company. Stock trading involves buying and selling shares. One simple form of trading is to purchase shares in publicly listed companies – such as Amazon, Google, or Tesla – and then sell them for a profit if the price of the stock rises.

How do stock prices change?

The price of a single share in a company is calculated by dividing the total market value of the company by the number of shares.

This price rises and falls due to various factors, such as the company's performance or the implementation of new government regulations. Global events can also play a part: the pandemic and turmoil in the Middle East are prime examples of this. Such factors affect the demand and availability of a company's stock. If there are more buyers than people willing to sell, the price will likely rise. If there are more sellers in the market than buyers, the stock's price tends to drop.

What to consider before investing

Only invest what you can afford to lose

Stock trading is a risky venture: the value of stocks can rise and fall due to external economic factors. As a result, you may get back less money than you originally invested.

Start with small investments

It's a good idea to give yourself time to get used to buying and selling stock via trading accounts. This is especially true if you're new to trading shares in an online environment.

Do your homework

Investigate each company before trading in their stock. Visit their website to find out what they do and how they are performing. You should also check for economic news and trading reports.

Golden rules for stock trading

Do your research

With online stock trading you're looking for short-term gains in what can be a volatile market. Doing your research when picking which stock to invest in, when to buy and when to sell, is extremely important.

If you're not an experienced trader, it can help to pick a share trading platform that gives you the insights you need to make those decisions. But keeping yourself informed and up to date about how the market is performing will help you hone those skills over time.

That said, even the most experienced traders lose money from time to time, as there is always a risk when trading stocks.

Diversify your portfolio

Investing in a wide range of stocks can help to maximise returns. A broad portfolio is more resilient to economic changes as different stocks react in different ways to the same set of circumstances.

So while certain stocks may drop in price in reaction to a particular event, others may rise or be unaffected and thus limit any losses or even allow you to make a profit.

Don't panic

Try to avoid the temptation to sell during momentary market dips. The stock market is full of peaks and troughs, and it may be smarter to hold your nerve (and stocks) and ride out any short-term falls to gain long-term profits.

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About the author

Lucinda O'Brien

Lucinda O'Brien has spent the past 10 years writing and editing content for regional and national titles. She applies her industry knowledge to ensure readers can make confident financial decisions.

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References

1.Ownership of UK quoted shares 2024 Office for National Statistics, January 2026

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