Buying and selling of stock is usually done through a stock broker. Although there are other ways of buying and selling stock, they too will have to eventually go through a stock broker.

There are three different types of service offered by stockbrokers:

• Advisory
  Where you are given advice on which stocks to buy and sell.
• Discretionary
  Where the stock broker is authorized to make decisions on buying and selling stocks on your behalf. This really only applies to those people who have large stock portfolios exceeding $40,000 in value.
• Dealing-Only
  Also called execution-only. Where you make the decision on which stocks  you wish to buy and sell, without advice, and tell the stockbroker what action to take on your behalf.

You deal with stockbrokers face to face or by phone, as well as by post, through branches of banks, as well as over the Internet.

The difference between the buying and selling price of stock is known as 'the spread'. The bigger the company and the more often the company has its stock traded, the smaller the spread. Smaller companies or those companies in which shares are traded less regularly generally have a bigger spread. You can conclude from the spread that the bigger the spread, the less liquid, or easily sold the shares will be.

Buying Stock

You can choose to buy either a certain number of stocks, or up to a certain value. In either case you can state the maximum price you are willing to pay for each stock; this is known as a 'limit order'. However, not all trading companies will accept this type of order, and even if they do, then they are usually limited to a time period, for example 24 hours or 48 hours depending on the company. If you are not sure what stock you want to buy, ask your personal financial planner for information and advice.

Selling Stock

Your stockbroker is obliged to sell at the best price they can get for your stock. This is known as the 'best execution'; however you can also specify the minimum amount you are prepared to accept. Like 'limit orders' when buying, not all firms will accept this. If a firm does, it may again be limited to a specific time period.

When buying and selling stock, it is important to be well informed, either by doing your own research or by taking advice from your personal financial planner or other independent advisor.