How to buy stocks on the NGX, step by step

Buying shares on the Nigerian Exchange follows a defined path from choosing an intermediary to holding a position in your name at the central depository. This page sets out that path in plain steps, drawn from public information about how the market works.

Choose a stockbroker that is a member of the exchange

A stockbroker is the firm that receives your order and routes it to the exchange. Only firms admitted as dealing members of the Nigerian Exchange can execute trades there, so confirm membership before you commit. Ask how the firm handles orders, what its fee schedule looks like, how it reports trades to you, and whether it offers a digital onboarding route. Compare a few firms on service and cost rather than on promises of performance.

Open an investor account

Onboarding requires identity documents. Expect to provide a government-issued photo ID, proof of address, your bank details, a signature specimen and a passport photograph, and to complete a risk profile questionnaire. Some firms also ask for a tax identification number. The account is opened in your own name; avoid arrangements in which someone else holds your shares on your behalf.

Set up the central depository account

Shares on the exchange are held electronically through the central depository, and your broker arranges a depository account linked to your investor account. Once active, it is the record of what you own. Keep the account details safe and check that your name matches your identity documents exactly, since mismatches complicate later sales and transfers.

Fund the account

Transfer money from a bank account in your own name to the account your broker designates for client funds. Never send money to a personal account. Keep the transfer receipt, and confirm that the funds appear in your trading account before you place an order.

Choose a share

Decide what you want to own and why. Read the company's public disclosures, its results announcements and the exchange's own company information pages. Consider the sector, the size of the business, how liquid the stock is and how it fits with the rest of your holdings. A share that is hard to trade can be difficult to exit.

Understand order types

A market order asks to be filled promptly at whatever price is available, which means the price you get may differ from the last one you saw. A limit order sets the highest price you will pay, or the lowest you will accept when selling, and fills only at that level or better; it may not fill at all. Use limit orders when price certainty matters more than speed.

Settlement

After a trade is executed, settlement takes place a few trading days later, when cash and shares change hands and the position appears in your depository account. Until then the trade is pending. Check the contract note your broker issues and confirm the position once settled.

Selling

Selling follows the same route in reverse: place an order through your broker, choose market or limit, and settle on the same cycle. Make sure the shares are available in your depository account and that your bank details are current.

Fees and records

Costs exist at several points, including brokerage commission, exchange and depository charges and statutory levies. Ask your broker for the full schedule before trading; no amounts are stated here because they change. Keep contract notes, funding receipts and statements, and reconcile them against your depository records periodically.

Risk reminder

• Share prices can fall as well as rise, and you may recover less than you invested.
• Liquidity can disappear, leaving you unable to sell at a chosen price.
• Concentrating in a single stock or sector magnifies losses when things go wrong.
• Only deal with firms you have verified as members of the exchange, and keep your credentials private.
• Past results tell you nothing certain about future outcomes.

This page is compiled automatically from public data and is informational only; it is not advice on any share.