How to Buy Shares and ETFs on the ASX – 2020 Guide

Investing in stocks and Exchange Traded Funds (ETFs) has traditionally been a relatively esoteric task, with only a select few having the drive and interest to learn the ins and outs of investing. However, in this modern era, it has never been easier to invest, due to the abundance of investing apps and services. Today I will cover how to buy shares and ETFs on the Australian Stock Exchange (ASX). I will be going over what the different buy options are, how you can place an order and how you can sell your stocks.

How to Buy Shares Step 1 – Open your Brokerage Account

The first thing you will need to do is log into your brokerage account. If you don’t have a brokerage account, I personally recommend using SelfWealth as it offers the cheapest brokerage fees in Australia. Once you are in your brokerage account, utilise the search feature to search the stock that you would like to purchase.

This will typically work using the full name of the stock or the ASX code which is generally 3-4 letters. For example, if you would like to purchase the Vanguard Australian Shares Index ETF you can either type it in full or use the ASX code which is VAS. Googling the full fund name will typically provide you with the code at the top of your search results, as seen in the photo below:

Once you search your ASX code, you will be met with a screen similar to this. For this guide, I am using SelfWealth so depending on what brokerage platform you are using, you may encounter slightly different pages and information.

From this point, simply click on the ‘Buy’ feature and it will take you into a new page

How to Buy ASX

Assuming you have topped up your account and have a sufficient cash balance, you will be able to make a purchase. For any purchases, it is typically recommended to buy in chunks of $2,500 or higher to offset the % of the purchase price that goes towards brokerage costs. From this point, you have two options when it comes to your purchase amount. You can either buy a Quantity of units or a Value of units.

How to Buy Shares – Purchase Amount Options

Option 1 – Quantity

When you purchase a quantity of units, you will end up paying the unit amount x the value of the unit. For example, if you wanted to purchase 50 units of VAS that were trading at $75 per unit then it would cost you 50 x $75 = $3,750 to cover the cost of those units. In addition to the $9.50 brokerage fee from SelfWealth, resulting in a total expense sum of $3759.50. This method can be useful for people who like to keep an even number of units or like to purchase the same quantity of units with each transaction. However, your expenses will fluctuate depending on the unit price.

Option 2 – Value

When you purchase using the value feature, you insert the amount of money that you are willing to spend on your transaction. The value sum that you enter will then have the brokerage cost subtracted and the new sum will then be divided by unit price. As a result, you will purchase the maximum amount of units that your value sum can cover factoring in brokerage cost.

For example, if you wanted to invest $3,750 to buy VAS that is trading at a unit price of $75 it would work cost you: $3750 – $9.50 = $3700.50. $3700.50 divided by 75 = 49.34 units. You can’t own 34% of a unit so you would pay the cost of 49 units + brokerage and be reimbursed the remainder. In this instance that works out to be: Value Sum Total (minus brokerage fee) – Unit Cost Total = Remainder


$3750 – $9.50 = $3700.50 (Value sum total minus brokerage fee)

49 x $75 = $3,675 (Unit Cost Total)

$3,700.50 – $3,675 = $25.50 (Remainder)

In this instance, you have spent $3,675 to purchase 49 units of VAS and an additional $9.50 on brokerage, resulting in a total expense of $3,684.50. As you didn’t have the funds to purchase an additional share with the remaining amount, the remaining $25.50 gets returned to your cash balance.

How to Buy Shares – Price Options

The next purchasing option to consider is your Price Type.

Price Option 1 – Market then Limit

When you using Market then Limit, you effectively place an order against the best bid when buying shares. If there are insufficient shares in the market to complete the order then the remaining balance of your order is then placed into the market as the best offer price and will remain there until more sellers are available to sell at that price.

This typically means that the majority of the time, your purchase price will go through based on the most recent pricing for that unit in the market. It should be noted that this order will only be processed immediately if placed when the ASX is trading, which is 10:00 AM – 4:00 PM Sydney Time from Monday to Friday. If you place a market order outside of these hours, it will default to the market price on open the following trading day.

Price Option 2 – Limit

Limit allows investors to set a limit on the maximum price they are willing to pay for a unit. For example, if you believe that your stock is selling at an unreasonably high price but believe that it will drop to a price that you consider to be a good deal, you can place a limit order based on that amount. When you invest through a Limit, regardless of whether you select Quantity or Value as your purchase type, you will need to input the maximum price you are willing to pay for that unit.

For example, if VAS is trading at $75 and you are only willing to pay $70 for it, you can execute a limit order where you say you are willing to either purchase X amount of units at that price (Quantity) or you want to invest the total value of your sum to purchase the maximum amount of VAS when it hits a $70 trading price.

How to buy shares and ETFs on the ASX - Limit Order

If you select the Limit method, you also need to select an Expiry Type option. When you select this option, you put a time-frame on the length in which you want to keep your Limit purchase valid for. The minimum expiry type for a limit order is the remainder of that trading day. At 4:00 PM, if the stock doesn’t drop to your limit unit price, then the order will be cancelled as that trading day is officially over. Alternatively, you can select your limit order to last weeks or even months.

Finalising your Purchase – Review Order

To finalise your purchase, you will then need to select ‘Review Order’. It will then open a popup which I highly recommend you double or even triple check before purchasing. This is to ensure that all your order is correct before processing. You can also enter additional information such as why you chose this particular investment and whether you are Bearish or Bullish. This information is optional and is used to provide analytics to other investors.

Once you are happy that all the details are correct, you simply click ‘Confirm Order’ and it will be processed. If you have chosen Market, then Limit it will likely be processed immediately. If you have entered a Limit order, then it may be up for a while before the price drops to your Limit amount.

How to Cancel an Order

If you have entered a limit amount that you are unhappy with, you can cancel it by doing the following:
Go into ‘My Orders’ then click on the order that you are unhappy with. From there you will see a prompt:

How to Buy Shares and ETFs - Cancel Order

Click ‘Cancel Order’ to cancel the order completely. If you wish to adjust your limit price or the quantity/value of your purchase, you can also click ‘Edit Order’ and re-enter the updated data.

What Happens After You Buy Your Shares?

Once your purchase is finalised you will receive a notification from your broker stating that your order has been filled. This will include the Order ID, the quantity of units purchased, what you purchased, your limit number (if you entered one), the Avg Price (what you paid per unit) and the total value of your purchase.

Additionally, you will receive an email from your broker confirming your purchase with all the relevant purchasing information to store for your record keeping. Over the next week or so, you should also receive a paper copy of your purchase and a way in which you can update these details to be reflected on a portfolio tracker such as Sharesight for tax purposes.

What Investing Options Are There?

There are several investing options available on the ASX. These include ETFs, Shares, LICs and Reits among others. If you are looking for more information on these investing options, I have attached some easy to read guides below:

ETFs Explained

LICs Explained

REITs Explained

Looking to Sign Up Through SelfWealth? Click Here For 5 Free Trades

If after reading this review you have decided to open an account through SelfWealth, you can use my referral link to get 5 free shares during your first month. This means that you can save up to $47.50 on brokerage fees, regardless of how little or how much you invest with each transaction.

New members also receive a complimentary 90 day free trial of SelfWealth Premium which is an optional service that provides market depth, stock analysis and live pricing. After the trial ends, you can either elect to continue your subscription to SelfWealth Premium or you can simply use the free version.

One Comment on “How to Buy Shares and ETFs on the ASX – 2020 Guide

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