Tip 6: Where to buy stocks? Choosing the right trading venue
Once you have defined your investment strategy and decided to buy a company share or another security, you must enter the securities identification number (WKN or ISIN) in your broker’s trading screen and select on which exchange you buy your security want. In Germany you have the choice between the Frankfurt Stock Exchange, the XETRA system of the Frankfurt Stock Exchange and some regional stock exchanges (Stuttgart, Berlin, Düsseldorf, Hamburg …).
You can now buy many securities in the over-the-counter direct trading buy and sell. As an investor, you save on stock exchange fees and brokerage fees. Also, you don’t have to wait for your order to be executed on the exchange. Our recommendation is therefore: buy common stocks through direct traders such as Tradegate or Lang & Schwarz.
You can trade stocks directly at various trading venues these days. The principle is simple: In the order mask of your online broker, you place a price request for 20 BASF shares, for example. The trading partner of your custodian bank will then inform you of a non-binding purchase or sale price. Since stock market prices change quickly, you only have a few seconds to decide on the offer. If you do not do this, you can then submit a new binding price request. You can also trade certificates and warrants conveniently and directly with the issuing bank, the so-called issuer. Provided your custodian bank offers OTC direct trading with this issuer, i.e. with the corresponding direct dealer. It is best to check this before opening your securities account!
Which trading venue is the cheapest depends on many factors: Your planned volume for securities trading, the commission (agent’s commission) and the spread, i.e. the difference between the buying and selling price, are particularly relevant. In the case of standard stocks such as DAX stocks, the differences are usually negligible. In the case of secondary stocks with a low trading volume, on the other hand, you should make sure that your security is actively traded on the trading venue you have chosen, so that you can buy or sell at a price that is in line with the market. You should also exercise caution with over-the-counter direct trading outside of regular trading hours. Since the direct trading partners bear a higher risk here, the spreads in securities trading are regularly higher than during regular stock exchange hours.
Tip: Use the comprehensive range of information on finanzen.net. Here you will find the current prices and trading volumes on the various trading venues for each security (example: Siemens share exchanges). Choose a trading venue where your shares are actively traded (stock exchanges and stock exchange turnover for Siemens shares).
Also important when buying and selling shares: Always place your order with a limit (a price limit). In this way, you can ensure that you do not pay an excessive price when you buy, and that you do not receive a price that is too low for your shares when you sell them. When choosing your broker, make sure that you do not pay any fees for setting, changing or removing a limit. Most online brokers do not charge any fees here, including the depot recommended by us finanzen.net zero1 – free of charge anyway – is one of these providers.