Selling Stocks Online: A Step-By-Step Guide

Quick answer

• Identify your brokerage account where the stock is held.
• Log in to your online brokerage account platform.
• Locate the specific stock you wish to sell in your portfolio.
• Choose the “sell” option and enter the number of shares.
• Select your order type (e.g., market, limit) and review details.
• Confirm the sale; funds typically appear in your account within a few business days.

Who this is for

• Investors who own stocks and need to liquidate them for cash.
• Individuals looking to rebalance their investment portfolio.
• Anyone who wants to understand the process of selling securities online.

What to check first (before you act)

Goal and timeline

Before selling any stock, clarify why you need to sell and when you need the funds. Is it for a short-term need, like a down payment, or a long-term goal, like retirement? Your timeline can influence the type of sell order you choose and whether selling is the right decision at this moment.

Current cash flow

Assess your current financial situation. Do you have sufficient cash reserves to cover your immediate needs and upcoming expenses without needing to sell investments? Selling stocks when you have ample cash on hand might be a strategic choice, whereas selling out of necessity could lead to less favorable outcomes.

Emergency fund or safety buffer

Ensure you have a well-funded emergency fund. This typically covers 3-6 months of essential living expenses. Relying on selling investments to cover unexpected costs can disrupt your long-term financial plan and may force you to sell at an inopportune time.

Debt and interest rates

Review any outstanding debts, especially those with high interest rates. Sometimes, it’s financially more advantageous to sell investments and pay off high-interest debt rather than continue paying interest. Compare the potential returns of holding the stock against the cost of your debt.

Credit impact

While selling stock doesn’t directly impact your credit score, the resulting cash flow or changes in your financial standing might indirectly affect it. For example, if you sell stock to cover a loan payment, ensuring that payment is made on time will help your credit.

Step-by-step (how to sell stock online)

1. Log in to your brokerage account.

• What to do: Access your online brokerage account using your username and password.
• What “good” looks like: You are securely logged into your account dashboard.
• Common mistake: Forgetting your login credentials. Avoid this by using a password manager and enabling two-factor authentication.

2. Navigate to your portfolio or holdings.

• What to do: Find the section that displays all the investments you currently own.
• What “good” looks like: A clear list of your stocks, bonds, ETFs, and other assets.
• Common mistake: Not being able to find the specific stock you want to sell. Familiarize yourself with your brokerage’s layout beforehand.

3. Locate the stock you wish to sell.

• What to do: Scroll through your holdings or use the search function to find the specific company’s stock.
• What “good” looks like: The stock’s name and ticker symbol are clearly identified.
• Common mistake: Mistaking one stock for another, especially if you own similar companies. Double-check the ticker symbol.

4. Initiate the sell order.

• What to do: Click on the stock and select the “Sell” option.
• What “good” looks like: The order entry screen appears, ready for you to input details.
• Common mistake: Accidentally clicking “Buy” instead of “Sell.” Carefully read all prompts.

5. Specify the number of shares to sell.

• What to do: Enter the exact number of shares you want to sell, or choose to sell all shares.
• What “good” looks like: The quantity is accurately reflected in the order form.
• Common mistake: Selling more shares than you actually own (a short sale, which is a different strategy) or an incorrect quantity. Be precise with the number.

6. Choose your order type.

• What to do: Select either a “Market Order” (sells at the best available current price) or a “Limit Order” (sells only at your specified price or better).
• What “good” looks like: You understand the implications of each order type for your sale.
• Common mistake: Using a market order when you need to ensure a minimum sale price, potentially selling for less than you expected. Understand the difference between market and limit orders.

7. Set your limit price (if applicable).

• What to do: If you chose a limit order, enter the lowest price you are willing to accept for your shares.
• What “good” looks like: The price you set is realistic based on current market conditions.
• Common mistake: Setting a limit price too high, which may prevent the order from executing. Research recent trading prices.

8. Review your order details.

• What to do: Carefully examine the stock, number of shares, order type, limit price (if any), and estimated proceeds.
• What “good” looks like: All information is accurate before submission.
• Common mistake: Overlooking a typo or incorrect detail, leading to an unintended transaction. Take your time and verify everything.

9. Confirm and submit the sell order.

• What to do: Click the “Submit” or “Confirm” button to place your order.
• What “good” looks like: You receive a confirmation that your order has been placed.
• Common mistake: Clicking submit multiple times if you don’t get immediate feedback, potentially placing duplicate orders. Wait for the confirmation message.

10. Monitor order status.

• What to do: Check your brokerage account for updates on your order’s status (e.g., open, filled, canceled).
• What “good” looks like: The order status accurately reflects its execution.
• Common mistake: Assuming an order is filled without checking, missing out on a sale or an incomplete transaction.

11. Receive proceeds.

• What to do: Once the order is filled, the cash from the sale will be credited to your brokerage account.
• What “good” looks like: The funds are available in your account, usually within a few business days (settlement period).
• Common mistake: Expecting funds to be immediately available for withdrawal. Understand the T+2 settlement rule (trade date plus two business days).

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
<strong>Selling based on emotion</strong>	Selling during market downturns, locking in losses; selling during rallies, missing gains.	Stick to a pre-defined investment plan; use limit orders to avoid panic selling.
<strong>Not understanding order types</strong>	Market orders can execute at unexpected prices; limit orders may not fill.	Learn the difference between market and limit orders; use limit orders for price control.
<strong>Ignoring settlement periods</strong>	Expecting funds immediately after selling, leading to cash flow issues.	Understand that sales take time to settle (typically T+2); plan withdrawals accordingly.
<strong>Not checking for fees</strong>	Unforeseen transaction fees reducing your net proceeds.	Review your brokerage’s fee schedule before trading.
<strong>Selling too much</strong>	Depleting your investment portfolio prematurely, hindering long-term growth.	Define your selling needs clearly and stick to selling only what is necessary.
<strong>Forgetting about taxes</strong>	Underestimating capital gains tax liability, leading to a surprise bill.	Consult tax advisor; track your cost basis and gains/losses accurately.
<strong>Using incorrect ticker symbols</strong>	Selling shares of the wrong company, leading to unintended financial consequences.	Always double-check the ticker symbol before confirming any trade.
<strong>Not reviewing order details</strong>	Submitting an order with incorrect share count, price, or type.	Take a moment to carefully review all order parameters before final confirmation.
<strong>Failing to monitor order status</strong>	Not knowing if your order was executed or if it’s still pending.	Regularly check your account for order confirmations and status updates.
<strong>Selling high-growth potential stocks</strong>	Forgoing future significant gains for short-term cash needs.	Re-evaluate your long-term financial goals and the necessity of selling growth stocks.

Decision rules (simple if/then)

• If you need funds immediately for an emergency, then use a market order because it will execute quickly, but be aware of the potential price.
• If you want to ensure you get a specific price or higher for your shares, then use a limit order because it will only sell at your set price or better.
• If the stock price is significantly below your desired selling price, then consider holding the stock longer, because it might recover and you’ll avoid locking in a loss.
• If you are selling to rebalance your portfolio, then sell the portion of the stock that exceeds your target allocation because this maintains your desired risk profile.
• If you have held the stock for over a year, then selling may result in long-term capital gains, which are taxed at a lower rate than short-term gains, because the IRS incentivizes longer holding periods.
• If you have held the stock for less than a year, then selling may result in short-term capital gains, which are taxed at your ordinary income tax rate, because the IRS views these as less favorable for tax purposes.
• If your brokerage account has a minimum balance requirement and selling would drop you below it, then consider the potential fees or penalties because you might incur additional costs.
• If you are unsure about the tax implications of selling, then consult a tax professional because they can provide personalized advice based on your financial situation.
• If the stock’s performance has fundamentally deteriorated and the outlook is poor, then selling might be a prudent decision to cut your losses, because continued holding could lead to further declines.
• If you have multiple stocks to sell, then prioritize selling those with the highest unrealized losses if you plan to offset capital gains, or those with the highest unrealized gains if you need cash and want to realize profits.
• If you are selling a stock that has performed exceptionally well and you want to lock in profits, then consider using a limit order slightly below the current market price to ensure you get a good exit point without missing the opportunity entirely.

FAQ

Q: How long does it take for the money to appear in my bank account after selling stock?

A: After your stock sale is executed, the funds typically take two business days to settle in your brokerage account (known as T+2 settlement). From there, you can initiate a withdrawal to your bank account, which can take an additional 1-5 business days depending on your bank and brokerage.

Q: Are there fees associated with selling stocks online?

A: Many online brokerages have eliminated commission fees for stock trades. However, always check your brokerage’s fee schedule, as there might be other fees, such as account maintenance fees, wire transfer fees, or regulatory fees.

Q: What is the difference between a market order and a limit order?

A: A market order is an instruction to buy or sell a stock immediately at the best available current price. A limit order is an instruction to buy or sell a stock only at a specific price or better. Market orders guarantee execution but not price, while limit orders guarantee price but not execution.

Q: Will I have to pay taxes when I sell stock?

A: You will likely owe capital gains taxes if you sell stock for more than you paid for it (your cost basis). If you sell for less, you may be able to claim a capital loss. The tax rate depends on how long you held the stock.

Q: What is “cost basis”?

A: Your cost basis is generally the original price you paid for a stock, including any commissions or fees. This is crucial for calculating your capital gains or losses when you sell.

Q: Can I sell stock if I don’t have a computer?

A: Yes, most online brokerages offer mobile apps for smartphones and tablets, allowing you to manage your portfolio and place trades from anywhere.

Q: What happens if my sell order doesn’t get filled?

A: If you used a limit order and the stock price never reaches your specified limit price, your order will not be executed. It will remain open until its expiration or until you cancel it. Market orders are generally filled immediately.

What this page does NOT cover (and where to go next)

• Tax implications in detail: Consult a tax professional for personalized advice on capital gains, losses, and tax-loss harvesting strategies.
• Advanced trading strategies: For complex strategies like options trading or short selling, seek specialized education and consider consulting a financial advisor.
• Investment advice: This guide focuses on the mechanics of selling. For advice on whether to sell specific investments, consult a qualified financial advisor.
• International stock sales: Procedures and tax rules can differ significantly for stocks held in foreign markets. Research specific regulations for those markets.
• Estate and inheritance of stocks: Handling the sale of stocks inherited from an estate involves specific legal and tax procedures. Consult an estate attorney or tax advisor.