Online stock trading in South Africa: everything you need to know

What’s on this page?

1. What is a stock?
2. Why trade in stocks?
3. What is a stockbroker?
4. What is online stock trading?
5. What stocks can I trade online?
6. What are the costs for online stock trading?
7. How to trade in stocks online
8. Where can I learn more about online stock trading?

What is a stock?

A stock is a financial security that represents a portion of ownership in a company. Retail investors can buy shares from companies that are listed on a stock exchange.

The company will apply to list on an stock exchange, for example the LSE or NYSE, so that their shares can be bought and sold by anyone.

When it lists on the stock exchange, it's usually by way of an initial public offering (IPO). At this point its share price will be fixed, however from the first day of trading onwards, it will fluctuate according to market conditions.

When you buy shares in a company, you'll become a shareholder and part owner of the company. As an investor, you'll receive dividend payments if the company grants them and have voting rights.*

*With us you can only trade derivatives via CFDs.

Why trade stocks?

There are two reasons to take a position in the stock market.

• Firstly, you may want to earn an income from dividends. Certain shares are known as income stocks, and they have a reputation for paying stable and predictable dividends. These can be used for re-investment, or for income purposes. Note that you’ll only be eligible to receive dividends if you buy and hold your shares as a form of investment

• The second reason is speculating on share price movements. For example, if a share you’ve bought appreciates in value, you can sell it for a profit. Conversely, if it depreciates in value from the initial outlay you paid, it’ll result in a loss. When trading CFDs, you can also go short, which is a way to profit from a share price falling¹

Ready to start trading?

What is a stockbroker?

A stockbroker is a person or company that executes your buy and sell orders on a stock exchange. They function as a middleman between the stock exchange and a client that wants to get exposure, because the public can’t interact with the exchange directly.

Note that a stockbroker must be licensed to facilitate the purchase and sale of assets on your behalf. We’re a licensed stockbroker and have an award-winning platform² that’s easy to navigate.

What is online stock trading?

Online stock trading is the act of using a platform like ours to take a position on shares.

With trading, you speculate on the share price movement without taking ownership. You’ll go long if you think that the price will rise or go short if you think that it’ll fall.¹ This type of exposure often comes with a higher risk and is done with a more short-term outlook.

Trading on stocks

• When trading, you’ll be using derivatives like CFDs to predict on an asset’s price movements ¹
• You never take ownership of the underlying asset itself
• You only put down a margin deposit to open your position. This is known as leverage ¹
• You trade over-the-counter directly with us
• Because you’re predicting on price movements using derivatives, you can ‘go long’ and ‘short’
• We offer 17,000* markets including shares, ETFs, indices, forex, commodities and more

*IG Group’s total markets

What stocks can I trade in online?

With us, you’ll trade on 13,000 international stocks online. When you trade on shares like Amazon, Apple, and Tesla, you’ll take a long or short position and your profit – or loss – will depend on your prediction.

You can also take a position on popular ETFs, which are a collection of stocks that track the performance of more than one company at once.

What are the costs for online stock trading?

With trading, the first thing to consider is the spread. This refers to the difference between the buy and sell price. Additionally, there are fees and charges to consider depending on your position size and brokerage you choose.

With CFD shares, we charge commission but any losses on CFD positions can be offset against profits for capital gains tax (CGT).³

How to trade in stocks online

With us, you can trade stocks via CFDs. Below, we’ve listed quick steps to get you started:

1. Create a live account or practise on a demo
2. Search for your preferred stock
3. Select your deal size and manage your risk
4. Open and monitor your position

Where can I learn more about online stock trading?

You can learn more about online stock trading on IG Academy and our website. We have a collection of trading courses that’ll help you sharpen your skills.

As part of your research on financial markets, you can check news and analysis from our industry experts to stay updated on current economic events before you take a position.

Once you’ve built up your confidence using the educational material, you can open a demo account with us to test different trading strategies in a risk-free environment. Your account will be credited with £10,000 and R1,000,000 in virtual funds to practise without having to risk any real money.

You can analyse and learn more about different market conditions that influence the price of stocks from live charts all housed on one platform. When you’re satisfied with your progress, you can open a live account.

Try these next

Learn more about the tools and mechanisms you'll use to trade the financial markets online

Explore what forex trading is and how to speculate on different currency pairs

Create a trading account that gives you access to 17,000* global markets on one platform

*IG Group’s total markets