The most common way to buy and sell stocks is through an online trading platform. Many banks in Germany offer these services; however, independent companies also provide this service for a fee. These platforms have a large selection of German stocks, making buying and selling them easy. The following steps will help you get started:
Open a brokerage account
Most of the time, you will need a bank account to trade with your broker. You can find out if your bank offers brokerage accounts by calling their customer service line. Your broker should be able to give you more information on opening up an account, as well as walk you through signing the required documents.
Decide on the type of account to open
You will have two options for how you want your brokerage account set up: you can either open a standard account or a margin account. If this is your first time opening an account, there is no reason why you would need to go with a margin account; that is unless your broker offers special deals on these accounts.
Know the difference between stocks and bonds
Stocks represent part of a company; they give their owners voting rights at shareholder meetings. They also entitle their owners to a claim on company assets when the company is liquidated. On the other hand, bonds are IOUs issued by companies or governmental organizations; they entitle their owner to interest payments and repayment of the original investment when the bond reaches maturity.
Decide how to trade
Depending on your brokerage account, you will either be able to buy and sell stocks alone or stocks as well as bonds. When it comes to Germany specifically, there are several German stocks that investors should take a look at Siemens (SIE: GR), Daimler (DAI: GR), Adidas (ADDYY:GR), and Allianz (ALV: GR). Also check out bonds on the Deutsche Börse (Xetra:DB1).
Know which fees apply to you
There are many brokerage fees, including monthly maintenance charges and commissions for each buy or sell order you place. You will also have to pay tax on capital gains.
Open an account at a stock index futures and options exchange
This will allow you to trade stock index futures and options. There is no regulation needed, but some licensing fees may be involved. Furthermore, the Deutsche Börse offers both types of trading services, so check if your broker is associated here.
Learn how to read stock market quotes and charts
Stock indexes show how many companies in that index are traded publicly on the capital market. Some of these include DAX (Germany), M-DAX (Germany), CAC (France), FTSE 100 (Great Britain), and Nikkei 225 (Japan). The ticker symbol for each company goes like this: SIE:GR for Siemens , SDAX:S5E1 for all companies in the SDAX, and DB1.DE for Deutsche Börse.
Understand what a buy order is
A buy order allows you to purchase a stock at a specific price with a broker. The possibility exists that your order may not be filled due to varying market prices. In this case, your order can either be cancelled or left pending until it is fulfilled.
Place sell orders before you cash out
This will help ensure that you get the most money from selling off stocks. Some investors choose to hold onto their shares in hopes of getting more money if they increase in value later on; others plan on spending this extra income immediately.
A bit of German financial wisdom never hurt anyone: “Ein gutes Jahr, ein gutes Quartal – aber ein schlechtes Jahr kann auch einen nicht arm machen.” or “A good year won’t make you rich, but neither will a bad one leave you poor .” In other words, don’t let your mood hinge on monthly fluctuations in the market. The price of stocks is not always an accurate reflection of what they are worth. New investors who want to buy stocks germany are advised to use a reputable online broker from Saxo Bank.