I am looking to buy stocks but I would like to do so without a broker. From what I can tell, the exchanges are good ole boys clubs that require you know (or pay) someone in order to participate. Am I wrong? Is there a way to invest without an intermediary?

  • interesting question - looking forward to the answer. This is not quite quant finance related but I think it is nice to have in terms of general education
    – Probilitator
    Commented Mar 24, 2014 at 7:58
  • Do you mean direct stock-purchasing plans?
    – Cindy88
    Commented Mar 24, 2014 at 15:26
  • Some companies (Wal-Mart comes to mind) allow you to buy stocks directly from the company. I don't know that there's a general rule for how to do this, though.
    – Flimzy
    Commented Mar 24, 2014 at 19:15
  • Don't forget that direct stock purchase plans may carry fees that make using a broker cheaper possibly in some cases.
    – JB King
    Commented Mar 25, 2014 at 1:04
  • 1
    While it seems of great importance right now to avoid paying fees to "ole boys clubs" to buy stocks, as the answers point out, you may end up holding pieces of paper (share certificates) that will be much harder to sell when the time comes. You will also be paying for storage of these certificates, e.g. safe deposit box in a bank, etc. So don't let the tail wag the dog. Commented Mar 25, 2014 at 12:53

4 Answers 4


Yes! What you are describing is an "off-exchange" trade and can be done using stock certificates. Here, you will privately negotiate with the seller on a price and delivery details.

That is the old-school way to do it. Many companies (about 20% of the S&P 500) will not issue paper certificates and you may run a hefty printing fee up to $500 (source: Wikipedia, above).

Other other type of private-party transactions include a deal negotiated between two parties and settled immediately or based on a future event. For example, Warren Buffet created a deal with Goldman Sachs where Warren would have the choice to purchase GS shares in the future at a certain price. This was to be settled with actual shares (rather than cash-settled). Ignoring that he later canceled this agreement, if it were to go through the transaction would still have been handled by a broker transferring the shares.

You can purchase directly from a company using a direct stock purchase plan (SPP). Just pick up the phone, ask for their investor relations and then ask if they offer this option. If not, they will be glad for your interest and look into setting it up for you.

  • All of this plus "scripophily"
    – user662852
    Commented Sep 29, 2015 at 10:56

Am I wrong?

Yes. The exchanges are most definitely not "good ole boys clubs". They provide a service (a huge, liquid and very fast market), and they want to be paid for it. Additionally, since direct participants in their system can cause serious and expensive disruptions, they allow only organizations that know what they're doing and can pay for any damages the cause.

Is there a way to invest without an intermediary?

Certainly, but if you have to ask this question, it's the last thing you should do. Typically such offers are only superior to people who have large investments sums and know what they're doing - as an inexperienced investor, chances are that you'll end up losing everything to some fraudster.

Honestly, large exchanges have become so cheap (e.g. XETRA costs 2.52 EUR + 0.0504% per trade) that if you're actually investing, then exchange fees are completely irrelevant. The only exception may be if you want to use a dollar-cost averaging strategy and don't have a lot of cash every month - fixed fees can be significant then. Many banks offer investments plans that cover this case.


Agree with Michael here. The exchanges help you more than they will hurt. It begs the question why you want to avoid exchanges and the brokers since they do provide a valuable service. If you want to avoid big fees, most of the discount brokerages have tiny fees these days (optionshouse is down to $4), plus many have deals where you get 60 or more trades for free.

  • Since this doesn't answer the question I think it should be a comment on Michael's answer. Commented Mar 28, 2014 at 0:06

In theory you can buy shares directly from someone else who owns them. In practise, if the stock is listed on an exchange, they are unlikely to own them directly, they are likely to own them through an intermediary. You will have to pay fees to that intermediary to transfer the shares to your name.

There are thousands of small companies owned by the guy who started it and a few other investors. You can buy stock in that kind of company directly from the existing owners, as long as they are willing to sell you some. It's a super-high risk investment strategy, though. This is the kind of deal that happens on Dragons Den.

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