How to get common stock: A complete guide

How to get common stock

How to get common stock is a practical question for anyone starting to build equity exposure. This guide explains what common stock represents, the main routes to acquire common stock, step‑by‑step actions for retail investors, order mechanics, taxes, risks, and where to find authoritative guidance. You will also find Bitget‑centric custody and wallet options where relevant.

Definitions and basic concepts

Common stock represents ownership in a corporation and generally conveys voting rights, the potential to receive dividends, and a residual claim on assets after creditors and preferred shareholders in the event of liquidation. Common shareholders typically have the right to vote on corporate matters such as board elections and major transactions, though voting rights vary by share class.

Contrast with preferred stock: preferred shares usually have priority over common shares for dividend payments and liquidation distributions, but they typically carry limited or no voting rights. In a company’s capital structure, common stock is usually lowest in priority but provides capital appreciation potential and governance influence.

Primary ways to acquire common stock

There are several practical channels to obtain common stock:

• Buying on public exchanges through a brokerage account.
• Direct purchase plans (DSPPs) and dividend reinvestment plans (DRIPs).
• Participating in an initial public offering (IPO) or a direct listing.
• Receiving shares through employee compensation (ESPPs, RSUs, options).
• Investing in private companies via private placements or secondary marketplaces.
• Receiving shares as gifts, transfers, or through inheritance.

Buying via a brokerage account (public exchanges)

The most common route for retail investors to get common stock is via a brokerage account. If you want to know how to get common stock quickly and efficiently, a broker is usually the starting point.

Choose a broker type

• Online discount brokers: Low commissions, user interfaces for self‑directed investors, research and order tools.
• Full‑service brokers: Advisory services and personalized support (typically higher fees).
• Robo‑advisors: Automated portfolios that allocate into stocks/ETFs for a fee.

When selecting a broker, consider fees, available order types, research tools, fractional share availability, account types, and customer service. For custody and integrated crypto support, consider using Bitget’s trading platform and Bitget Wallet where available.

Account types and KYC

• Taxable (individual) brokerage accounts.
• Retirement accounts (IRAs in the U.S.).
• Custodial accounts for minors.

Opening an account requires identity verification (KYC) and may include proof of address. Fund the account by bank transfer, wire, or in some cases, debit card or ACH. After settlement of the funds, you can place orders to buy shares listed on exchanges such as the NYSE and NASDAQ.

Find tickers and execute trades

• Locate the company ticker symbol and confirm the exchange listing.
• Decide order size (number of shares or dollar amount if fractional shares are supported).
• Place order: market vs limit vs other order types (covered later).

Direct Purchase Plans (DSPPs) and Dividend Reinvestment Plans (DRIPs)

Direct Stock Purchase Plans (DSPPs) allow investors to buy shares directly from a company or its transfer agent, often with low fees and sometimes without needing a brokerage account. Dividend Reinvestment Plans (DRIPs) automatically use cash dividends to purchase additional common stock, compounding ownership over time.

Pros:

• Low cost for long‑term investors.
• Automated reinvestment helps dollar‑cost averaging.

Cons:

• Less liquidity for small, irregular trades compared to brokers.
• Not every company offers DSPPs/DRIPs; many have minimums and occasional fees.

Initial public offerings (IPOs) and direct listings

Companies sell shares to the public through IPOs or become publicly traded via direct listings. Retail access to IPO allocations varies. Large IPO allocations often go to institutional investors, but some brokers provide retail allocations or special IPO platforms.

• IPOs: Company issues new shares; underwriters allocate shares to investors.
• Direct listings: Existing shareholders list shares for trading without a traditional underwriting allocation; retail access is via exchanges through brokers.

Retail investors should understand that IPO pricing can be volatile and allocations may be limited. Carefully review the offering prospectus and regulatory filings before participating.

Employee equity and company compensation plans

Employees can acquire common stock through employer programs:

• Employee Stock Purchase Plans (ESPPs): Employees buy shares at a discount, often through payroll deductions.
• Restricted Stock Units (RSUs): Units convert to common shares at vesting dates.
• Stock options (Incentive Stock Options (ISOs) and Non‑Qualified Stock Options (NQSOs)): Options give the right to buy shares at a preset exercise price.

Taxation varies: options and RSUs have specific tax events at exercise or vesting; ISOs may trigger alternative minimum tax (AMT) rules. Employees usually receive shares deposited into a brokerage or custodial account, after any required exercises or withholding.

Private company investments and secondary markets

To get common stock in private companies, investors participate in private placements, angel or venture rounds, or buy on secondary marketplaces when shareholders sell restricted stock. These opportunities often require accredited investor status and carry higher liquidity risk and limited regulatory disclosure compared to public companies.

Gifts, transfers, and inheritance

Shares can pass between owners via gifts, inter‑account transfers, or estate transfers. Transfer agents record registered ownership and handle paperwork. Gifts and inheritance have tax basis and holding‑period implications that affect later capital gains calculations.

Practical step‑by‑step process for retail investors

If you’re asking how to get common stock for the first time, follow these practical steps.

1. Define objectives and risk tolerance

• Why do you want common stock? Income, growth, voting influence, or speculative trading?
• Time horizon and ability to absorb volatility.

1. Choose broker and account type

• Select a broker that supports the account features you need (taxable, IRA, fractional shares) and offers transparent fees. Consider Bitget for an integrated trading and custody experience where available.

1. Complete KYC and fund the account

• Verify identity, link a bank account, and transfer funds. Allow for clearing times (bank ACH/wire settlement differs by provider).

1. Research and select stocks

• Read company filings, financial statements, analyst reports, and up‑to‑date news items. Check valuation metrics (P/E, revenue growth, margin trends), balance sheet strength, and governance practices.

1. Place an order

• Choose order type and size; use limit orders if you want price control.

1. Monitor holdings and record keeping

• Keep broker statements, confirmations, and tax documents. Track dividends and corporate actions electronically.

Order types and execution mechanics

Understanding order types helps control purchase price and execution risk.

• Market order: executes at the prevailing market price; fast but price can vary.
• Limit order: executes only at or better than a specified price.
• Stop order: becomes a market order when a trigger price is hit.
• Stop‑limit: becomes a limit order when triggered.
• Market‑on‑open/close: executes at the opening or close price.
• Day orders vs Good‑Til‑Canceled (GTC): day orders expire at market close; GTC orders persist per broker rules.

Fractional share orders let you buy partial shares by dollar amount. Order routing, liquidity, and spreads affect execution quality and price received. Brokers may route orders to market makers or exchanges; review your broker’s disclosures on order execution practices.

Settlement, custody, and recordkeeping

• Trade settlement: U.S. equities generally settle on a T+2 basis (trade date plus two business days).
• Custody: brokers typically hold shares in “street name” for operational efficiency; registered ownership remains with the broker’s nominee but the investor is the beneficial owner.
• Transfer agents maintain the official shareholder register and issue certificates if requested.

Keep trade confirmations and year‑end statements for tax reporting. For employee shares, retain grant documents and vesting schedules.

Costs and fees

Common charges when you get common stock include:

• Commissions: many brokers offer zero‑commission equities trading, but some services still charge per trade.
• Spreads: difference between bid and ask prices; cost implicit in market orders.
• Exchange/SEC fees: small regulatory fees may apply to certain sell orders.
• Account fees: inactivity, transfer, or account maintenance fees in some brokers.
• DRIP/DSPP fees: some direct plans have enrollment or per‑purchase fees.

Zero‑commission brokers often monetize order flow or offer paid tiers for advanced tools. Compare total cost impacts, not just headline trade commissions.

Taxation and reporting considerations

Taxes depend on your jurisdiction. In the U.S. context, watch for:

• Capital gains: short‑term vs long‑term distinctions affect tax rates based on holding period.
• Dividends: qualified vs non‑qualified dividend tax treatment.
• Tax forms: 1099‑B (sales), 1099‑DIV (dividends), and wage statements for employee equity.
• Cost basis tracking: brokers report basis for many transactions, but investors must ensure accurate basis for gifts, inheritance, and splits.
• Wash‑sale rules: selling and repurchasing substantially identical securities within 30 days can disallow losses for tax purposes.
• Employee stock tax: RSUs count as ordinary income at vesting; options have specific timing and tax triggers; ISOs may affect AMT.

Consult a tax professional for individualized advice. Keep records of grants, exercises, and purchase dates.

Risks and considerations before acquiring common stock

• Market risk: share prices fluctuate with market conditions.
• Liquidity risk: small‑cap or private shares can be hard to sell at fair prices.
• Dilution: new share issuance can reduce ownership percentage.
• Bankruptcy priority: common shareholders are last to be paid after creditors and preferred holders.
• Concentration risk: excessive exposure to one company increases portfolio volatility.
• Corporate governance: voting rights may vary and affect shareholder influence.

Diversification and due diligence are essential. Understand the business model, financial health, and competitive position before buying stock.

Investor protections and regulation

Regulators and protections relevant to getting and holding common stock include:

• SEC and Investor.gov: securities regulation, required disclosures, and investor education.
• FINRA: self‑regulatory oversight for broker‑dealers and protection standards.
• SIPC: protects customer cash and securities held by a member broker up to stated limits.

截至 2026-01-15，据 Investor.gov 报道，SIPC 对客户现金和证券的保障上限为 500,000 美元，其中现金保障上限为 250,000 美元。

KYC/AML: brokers must comply with anti‑money‑laundering and know‑your‑customer rules to protect market integrity. Review broker disclosures and account protections before depositing funds.

Corporate actions and events that affect common stock

• Stock splits and reverse splits: change share count and per‑share price without changing immediate total market value.
• Dividends: cash or stock distributions that change ownership or cash flow.
• Mergers & acquisitions: may convert or cash out common shares.
• Tender offers and buybacks: companies may repurchase shares, affecting outstanding share counts.

Broker notices and transfer agents communicate corporate actions and needed investor responses. Maintain up‑to‑date contact information with your broker or the company’s transfer agent.

Special topics and practical variations

• Fractional shares and micro‑investing platforms let investors buy by dollar amount.
• American Depositary Receipts (ADRs) represent foreign company common stock in U.S. markets.
• Margin buying and shorting: advanced strategies with higher risk and borrowing costs.
• Automated investing and robo advisors: provide diversified exposure to equities through managed portfolios.

Bitget and Bitget Wallet can play roles in custody and secure asset management for investors who want integrated trading and wallet features where supported by local regulations.

Due diligence and research resources

Key due diligence steps before you get common stock:

• Read company SEC filings (10‑K, 10‑Q) for financials and risk factors.
• Review earnings reports and management commentary.
• Analyze valuation metrics and peer comparisons.
• Monitor news coverage and material events.
• Use brokerage research tools and independent resources for balanced perspectives.

Authoritative resources include Investor.gov, broker research centers, and established personal finance publishers. Always verify material facts using primary filings.

Glossary

• Broker: intermediary that executes securities trades for clients.
• Ticker: short symbol representing a company’s publicly traded shares.
• Market order: instruction to buy or sell immediately at the best available price.
• Limit order: order to buy or sell only at a specified price or better.
• DRIP: dividend reinvestment plan that turns cash dividends into additional shares.
• DSPP: direct stock purchase plan operated by some companies or transfer agents.
• IPO: initial public offering; first sale of shares to public investors.
• RSU: restricted stock unit; employee equity instrument that vests into shares.
• ESPP: Employee Stock Purchase Plan, often allowing employees to buy company stock at a discount.
• Cost basis: original value used to calculate capital gain or loss upon sale.
• SIPC: Securities Investor Protection Corporation, protects customer assets at member brokers up to coverage limits.

See also / further reading

• Official investor guides from Investor.gov and the SEC.
• Brokerage educational centers and company investor relations pages.
• Personal finance and investing publications for accessibility and comparisons.

Frequently asked questions (FAQ)

Q: Can I buy a single share?

A: Yes. Most brokers allow buying a single full share. Many brokers also offer fractional shares so you can invest by dollar amount.

Q: What documentation is needed to open a brokerage account?

A: Typically a government‑issued ID, proof of address, social security or tax ID number for U.S. accounts, and basic financial information for KYC.

Q: How long until I own the shares?

A: Ownership is recorded immediately on execution for record‑keeping, but trade settlement typically completes on a T+2 basis for U.S. equities.

Q: How are dividends handled?

A: Dividends paid in cash will appear in your brokerage account. If you enroll in a DRIP, dividends may be reinvested into common shares automatically.

References

• SEC / Investor.gov investor education materials.
• Brokerage and personal finance publishers (Investopedia, Fidelity, NerdWallet, Bankrate, CNBC, Business Insider, Kiplinger).
• Broker disclosures and transfer agent documentation.

Further exploration: if you want to know specific steps for your country or want a printable “how to buy your first share” checklist, ask and I will tailor it to your experience and jurisdiction. For custody and secure access, consider Bitget’s trading platform and Bitget Wallet for integrated account management and security options.