Can an Individual Buy Stock? Guide

Can an individual buy stock? Yes — most individuals can buy publicly traded stocks if they meet basic legal, identity and funding requirements. This guide explains eligibility, account types, platf...

2025-12-26 16:00:00

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Can an Individual Buy Stock?

Buying stocks is one of the most common ways individuals (retail investors) seek long‑term growth or income. If you ask “can an individual buy stock,” the short answer is yes — most people can. This article explains what "buying stock" means, who counts as an individual investor, the legal and account prerequisites, the platforms and order types you’ll encounter, costs and taxes to expect, risks and protections, special cases (IPOs, private shares, employer plans), alternatives like ETFs, and practical tips for beginners. It also highlights Bitget as a retail‑friendly platform and Bitget Wallet for custody when relevant.

Note: This content is educational only. It is not personalized investment advice. Check up‑to‑date regulatory and tax rules in your jurisdiction and consult official broker or tax guidance for your situation.

Overview and Quick Answer

What does it mean to "buy stock"? Buying stock means acquiring ownership shares of a publicly listed company (or an ownership interest via an exchange‑traded product). An individual, often called a retail investor, is a non‑institutional person acting with personal funds rather than on behalf of a company or large fund.

Can an individual buy stock? Yes. Most individuals can buy stock provided they meet a few typical preconditions:

Open an account with a broker or platform that offers access to the market.
Complete identity verification (KYC) and provide tax identification information.
Have available funds (cash, linked bank account, or margin if eligible).

Throughout this guide you will see how to satisfy those requirements, choose an account type, place orders, and manage costs and tax reporting. The phrase "can an individual buy stock" appears throughout this article to help you find practical answers and next steps.

Legal and Account Eligibility

Age and custodial arrangements

Most jurisdictions set a legal minimum age to enter binding contracts. In the U.S., for example, you must typically be at least 18 to open a standard brokerage account. If you are younger, a parent or guardian can open a custodial account (UGMA/UTMA) on your behalf. Key points:

Custodial accounts (UGMA/UTMA in the U.S.) let an adult manage securities for a minor until the child reaches the age of majority specified by state law.
Parents, guardians or custodians hold legal control over the account; the minor is the beneficial owner.
Brokerage custodial accounts may allow buying stocks, ETFs and receiving dividends; some restrictions apply for certain products or sophisticated strategies.
Once the minor reaches the age of majority, control typically transfers to them and the account becomes their property.

If you’re asking “can an individual buy stock” and you’re underage, custodial accounts are the standard legal pathway.

Residency, tax ID and KYC requirements

Brokers must perform Know‑Your‑Customer (KYC) and anti‑money‑laundering checks before allowing trading. Typical checks include identity verification, proof of address, and tax identifiers:

U.S. residents usually provide a Social Security Number (SSN) and personal identification (driver’s license or passport).
Non‑U.S. residents may need a Tax Identification Number (TIN) or equivalent and must complete forms such as W‑8BEN (to certify non‑U.S. status) or W‑9 for U.S. persons.
Brokers will verify identity and may request additional documentation for unusual activity or higher risk profiles.

KYC ensures brokers comply with local and international rules; without it you generally cannot open or fund a trading account.

Accredited vs. retail investor distinctions

Most public markets are accessible to retail investors. However, certain private offerings and private placements have eligibility rules:

Accredited investors (income/net worth thresholds in many jurisdictions) can access private equity, venture capital, and certain pre‑IPO investments.
Retail investors can trade publicly listed stocks and many exchange‑traded products, but might be restricted from private placements or some crowdfunding instruments.

So, "can an individual buy stock" in the public markets — almost always yes. Buying private company shares or participating in private deals may require accredited status or specialized secondary markets.

Account Types Used to Buy Stocks

Taxable brokerage accounts

A standard taxable brokerage account is the simplest way individuals buy and sell public stocks. Features:

Offers flexible deposits and withdrawals (subject to settlement rules).
Holds individual stocks, ETFs, bonds, and other permitted securities.
Investment gains and income are taxed in the year realized per local tax law.
Many brokers now offer fractional shares, zero‑commission trading for many U.S. stocks, and mobile apps for easy access.

When you wonder "can an individual buy stock" the taxable brokerage account is the default answer for everyday investors.

Retirement accounts (IRAs, 401(k)s)

Tax‑advantaged retirement accounts let investors buy stocks inside an IRA or 401(k) with tax benefits:

Traditional IRAs and Roth IRAs have contribution limits and tax differences: Traditional contributions may be tax‑deductible; Roth contributions are post‑tax with tax‑free qualified withdrawals.
In a 401(k), access to specific mutual funds or brokerage windows depends on plan design; not all plans permit individual stock trading.
Employer plans must follow ERISA and IRS rules; changes to withdrawal rules (for example, proposals to loosen 401(k) home‑purchase rules) are subject to legislative change and plan sponsor adoption.

As of January 16, 2026, MarketWatch reported a proposal to allow easier 401(k) withdrawals for home purchases; any such change would require congressional action and would be optional for individual employers to adopt. Check current rules before moving retirement money into stock purchases.

Direct Purchase Plans and DRIPs

Some companies offer Direct Stock Purchase Plans (DSPPs) and Dividend Reinvestment Plans (DRIPs).

DSPPs allow investors to buy shares directly from the issuer or transfer agent, sometimes with low or no fees.
DRIPs automatically reinvest cash dividends into additional shares (or fractional shares) of the company, compounding ownership over time.

Not every company offers these plans; when available they provide a direct alternative to broker execution.

Robo‑advisors and managed accounts

Robo‑advisors and managed accounts invest on your behalf using automated portfolio construction. They often favor ETFs and diversified baskets over single stocks, but some platforms allow custom allocations. These services are good if you prefer set‑and‑forget investing or lack time for active research.

Ways and Platforms to Buy Stocks

Online discount brokerages

Online discount brokerages are the most common route for individuals to buy stocks. Selection factors include fees, platform quality, research tools, fractional‑share availability, and customer support. Many established brokerages provide robust research, educational materials, and advanced order types. When deciding "can an individual buy stock" the brokerage you choose determines market access and costs.

Full‑service brokers and financial advisors

Full‑service brokers offer personalized advice, account management and broader financial services at higher costs. Investors may prefer these if they want tailored planning, tax optimization, or complex trading strategies.

Mobile trading apps and micro‑investing platforms

Beginner‑friendly apps and micro‑investing platforms offer fractional shares, recurring buys, simplified interfaces and educational features. These remove barriers to entry for new investors and answer the common question: "can an individual buy stock with small amounts of money?" — yes, via fractional shares and recurring contributions.

When choosing a mobile app, review custody arrangements and security features. Bitget’s mobile interface and Bitget Wallet are designed to provide user-friendly on‑ramps and custody for both traditional and digital asset exposure where available.

Exchanges vs. alternative venues

Orders placed by individuals are executed on public exchanges (NYSE, Nasdaq) or alternative venues like electronic communications networks (ECNs) and dark pools. Brokers route orders to market makers or execution venues; routing affects execution speed, price improvement and possible payment‑for‑order‑flow arrangements.

Step‑by‑Step Process to Buy Stock

Choose a broker or platform

Important selection factors:

Fees and commissions (many brokers offer $0 commission on listed stocks).
Account types supported (taxable, IRA, custodial).
Fractional share support and minimum deposit requirements.
Research tools, educational content and order capabilities.
Customer support and security credentials.

Bitget is positioned as a platform that serves retail users with intuitive tools and custody options; evaluate Bitget features alongside other brokers that meet your needs.

Open and fund the account

Common steps:

Complete the online application with personal details and tax ID.
Verify identity (upload ID, proof of address if required).
Link a bank account or initiate a deposit (ACH, wire, or transfer from another broker).
Meet any minimum funding requirement (many brokers have $0 minimums; some accounts or products may require more).

Once funded, you can place trades consistent with settlement rules.

Research and select securities

Basic due diligence:

Identify the company by ticker symbol and review recent financials, earnings, revenue trends, balance sheet strength, and analyst commentary where available.
Compare individual stocks with ETFs or index funds for diversification needs.
For dividend stocks, check payout ratio and dividend history.

Use broker research, company filings and reputable financial education sources. If you are new and asking repeatedly "can an individual buy stock" focus on understanding risk, diversification and how the investment fits your goals.

Place an order and settlement

Order process:

Enter the ticker and choose quantity (or dollar amount for fractional shares).
Select an order type (market, limit, stop, etc.) and time‑in‑force.
Review and submit the order; the broker confirms execution details.

Settlement: stock trades typically settle on T+1 or T+2 (trade date plus one or two business days) depending on the market and security type. Settlement affects when you can withdraw proceeds and transfer securities.

Order Types and Trading Mechanics

Market orders, limit orders, stop and stop‑limit orders

Market order: buy or sell immediately at the best available price — used for quick execution but may experience slippage in fast markets.
Limit order: sets a maximum buy price or minimum sell price; executes only at the specified price or better.
Stop order (stop‑loss): becomes a market order when a trigger price is reached; used to limit losses.
Stop‑limit order: becomes a limit order when triggered — gives price control but may not execute if the market moves past the limit.

Choose order types based on your goals for speed vs price control.

Time‑in‑force options (GTC, day)

Day order: cancels at the end of the trading day if not filled.
Good‑Til‑Canceled (GTC): remains active until filled or cancelled by the user (some brokers impose maximum durations).

Understand your broker’s defaults so you don’t accidentally leave orders active longer than intended.

Margin trading and short selling (risks & requirements)

Margin accounts let you borrow funds against securities to increase buying power. Short selling involves borrowing shares to sell them, hoping to buy back later at a lower price. Key cautions:

Margin introduces leverage and magnifies gains and losses; maintenance margin requirements apply.
Short selling carries theoretically unlimited downside risk if the stock price rises.
Margin and short selling typically require additional approvals, minimum equity and understanding of margin calls.

Many retail investors should avoid margin until they understand the risks and rules thoroughly.

Costs, Fees and Execution Quality

Commissions, spreads and platform fees

Many brokers offer $0 commission stock trading for listed U.S. equities; fees may still apply for options, OTC stocks or international trades.
Small spreads (difference between bid and ask) are a hidden cost, especially for low‑liquidity securities.
Brokers may charge account maintenance, inactivity, or subscription fees for premium research tools.

Always review the fee schedule before opening an account.

Payment for order flow and execution quality

Payment‑for‑order‑flow (PFOF) is when brokers route retail orders to market makers that pay for flow. This can subsidize zero‑commission trading but raises questions about execution quality. Factors that affect execution quality include routing, market volatility, and available liquidity. Regulators require brokers to report execution quality metrics for transparency.

Foreign trading fees and currency considerations

Buying non‑U.S. stocks can introduce:

Foreign exchange conversion fees.
Custody or settlement fees.
Higher trading commissions or regulatory levies.

If you intend to buy international stocks, understand the incremental costs and tax withholding rules in the issuer’s jurisdiction.

Taxes and Reporting

Capital gains and holding period

Capital gains taxes depend on how long you hold the stock:

Short‑term gains (typically held one year or less) are taxed as ordinary income in many jurisdictions.
Long‑term gains (held beyond one year in many countries) often enjoy lower tax rates.

Rules vary by country — consult tax guidance or a professional.

Dividends and qualified dividend treatment

Dividends are taxable when received. Some dividends qualify for preferential tax rates (qualified dividends in the U.S.), subject to holding period and other conditions. Non‑qualified dividends are taxed at ordinary income rates.

Tax forms and recordkeeping

Common U.S. forms include 1099‑B (sales) and 1099‑DIV (dividends); brokers provide year‑end tax statements. Maintain records of trade confirmations and cost basis to report gains and losses accurately. Wash‑sale rules that disallow loss recognition in certain replacement purchase scenarios may affect tax outcomes.

Risks, Protections and Investor Considerations

Market risk and volatility

Individual stocks can be highly volatile. Concentration in a few names increases portfolio risk. Diversification across stocks, sectors, or index funds reduces single‑company risk.

Liquidity, corporate actions and settlement risk

Low‑liquidity stocks can experience wide bid‑ask spreads and difficulty executing large orders. Corporate actions (splits, mergers, delistings, buybacks) affect ownership and may create short‑term price moves. Settlement failures are rare but possible; brokers and exchanges manage settlement processes to minimize risk.

Fraud, scams and platform security

Beware of pump‑and‑dump schemes and social media influencers offering specific stock tips without appropriate disclosures. As regulators have emphasized (for example, CONSOB and ESMA actions in early 2026), advertising investment products can be regulated — and influencers may face legal consequences for misleading or undeclared promotions. Use reputable brokers and strong account security (two‑factor authentication, unique passwords).

As of January 2026, CONSOB reiterated that promotional activity by influencers for speculative products can fall under investment advertising rules; avoid acting on unverified social media claims without independent research.

Investor protections (SIPC, FDIC differences)

Securities Investor Protection Corporation (SIPC) protects customers if a brokerage firm fails, covering missing cash and securities up to set limits — it does not protect against market losses.
FDIC protects bank deposits, not brokerage holdings. Brokers may use bank sweep programs that place cash in FDIC‑insured accounts; check details.

Understand what your broker insures and what risks remain with market exposure.

Special Cases and Limitations

Buying IPO shares and restricted allocations

Initial public offerings (IPOs) may have limited retail allocations. Retail investors often access IPO stock on the open market after listing rather than through initial allocations that favor institutional clients. Some brokers offer small retail IPO allocations or access via special programs, but availability varies.

Restricted stock, private companies and pre‑IPO shares

Private company shares and restricted stock units (RSUs) are different from public stock:

Private shares are typically available only to accredited investors or employees and are subject to transfer restrictions.
Secondary markets exist for some pre‑IPO shares but have lower liquidity and regulatory constraints.

Retail access to private or pre‑IPO stock is limited compared to public markets.

Non‑U.S. residents and cross‑border constraints

Account availability and product access depend on local regulations and broker policies. Non‑resident investors may face additional tax withholding, documentation (W‑8 forms), and sometimes broker restrictions. Always confirm a broker’s account acceptance policies before applying.

Employer stock plans and restricted stock units (RSUs)

Employer plans (ESPPs, RSUs) have special rules and tax consequences. RSUs typically vest over time and become taxable when they vest or when restrictions lapse. Employer plans may have blackout periods and trading windows — consult plan documents and tax advisors before selling employer stock.

Alternatives to Buying Individual Stocks

ETFs and index funds

Exchange‑traded funds (ETFs) and index funds provide diversified exposure to markets, sectors or themes with lower single‑company risk. For many new investors, these funds answer the question of how to get market exposure without the need to pick individual winners.

Mutual funds and target‑date funds

Mutual funds provide actively or passively managed portfolios. Target‑date funds automatically adjust allocations over time and are common in retirement accounts.

Options, CFDs and derivatives (advanced)

Derivatives such as options, contracts for difference (CFDs), and futures provide leverage or exposure to price moves without owning stock. They are complex, carry higher risk, and often require special account approval.

Stocks vs Cryptocurrencies — Key Differences for Individuals

Comparing stocks and cryptocurrencies highlights different regulatory, custody, and tax realities:

Regulation: Stocks trade on regulated exchanges with established market structure and investor protections. Crypto regulations vary by jurisdiction and are evolving.
Trading hours: Stocks usually trade on set exchange hours; many crypto markets operate 24/7.
Custody: Brokerages typically provide regulated custody (and SIPC protection for securities in some jurisdictions), while crypto custody can be exchange‑based or via self‑custody wallets like Bitget Wallet — each with different risk profiles.
Volatility: Crypto assets often show higher short‑term volatility compared with many established stocks.
Settlement: Stocks follow T+1/T+2 settlement conventions; crypto transactions settle on blockchains with network confirmations.
Taxes: Taxes differ across asset classes and by jurisdiction; consult tax guidance for specifics.

Bitget offers services bridging traditional and digital asset experiences. If you explore crypto exposure alongside stock investing, consider custody choices and regulatory status carefully.

Practical Tips for New Individual Investors

Start with clear financial goals and an investment horizon.
Determine risk tolerance and build an emergency cash buffer before investing.
Diversify — consider ETFs or broad funds if you lack comfort selecting individual stocks.
Use fractional shares or recurring purchases to dollar‑cost average smaller contributions.
Understand fees, taxes and settlement rules before trading.
Use paper trading or demo accounts to practice order types and platform navigation.
Keep strong account security and be wary of social media tips.
Consult a qualified financial professional for personalized planning.

If you want a user‑friendly platform with integrated educational resources and wallet options, explore Bitget’s trading and custody features to see if they match your needs.

References

Vanguard — How to invest in stocks online / Investing in individual stocks & ETFs
Fidelity — How to invest in stocks: A simple guide
NerdWallet — How to Buy Stocks / How to Buy and Sell Stocks
The Motley Fool — Step‑by‑Step Guide to Buying Stocks
SoFi — How to Buy Stocks: Step‑by‑Step Guide
Bankrate — How To Invest In Stocks / How to buy stocks guide
Experian — Can Anyone Invest in Stocks?

News and regulatory context cited in this article:

As of January 16, 2026, MarketWatch reported on a proposed plan to allow certain 401(k) withdrawals for home purchases; the proposal would require congressional action and adoption by plan sponsors.
As of January 2026, CONSOB (referencing ESMA guidance) reiterated that influencer promotions of financial products are subject to EU investment rules and can attract enforcement for unregistered or misleading promotions.
As of January 13, 2024, reports on the London Stock Exchange listing for the 21Shares BOLD ETP (combined Bitcoin and gold exposure) noted the product’s regulated listing and historical performance; the product was reported to have posted strong returns during its early period (example figure reported: 122.5% gain in GBP over a measured period).

(Reporting dates and sources are given to provide timely context; verify current rules and figures directly with official sources and broker disclosures.)

More Practical Steps — What to Do Next

If you want to act on "can an individual buy stock":

Define your goals and time horizon.
Choose an account type (taxable, IRA, custodial) and a platform that meets fee, research and custody needs. Consider Bitget for integrated tools and Bitget Wallet for custody where applicable.
Open and fund the account, complete KYC and tax forms.
Start small: consider ETFs or fractional shares while you learn order types and risk management.
Keep records for taxes and review annual broker statements.

Further explore Bitget features and educational materials to become comfortable with trading mechanics and security practices.

Final Notes and Disclaimers

This guide explains how an individual can buy stock in public markets and outlines related legal, tax, and platform considerations. It is educational in nature and does not constitute financial or tax advice. Rules, tax rates, and brokerage features change over time — always check with your broker, a licensed advisor, or official tax guidance for up‑to‑date and personalized information.

If you’d like, I can provide a checklist to open an account on Bitget or a simple comparison table of account types and common fees (no links). Would you like that next?

The content above has been sourced from the internet and generated using AI. For high-quality content, please visit Bitget Academy.