Internet trading does not come with expert advice normally. But it does come with live market updates so that you can buy stocks and keep track of your purchases online. You can become an expert yourself within a short period of time. But you must be careful not to make careless mistakes. In internet trading there is always a winner and a loser. But even the loser can become a winner if he waits patiently till the value of stock increases.
What is internet trading?
We live in technological era that allows us to do many things from home through the internet. Investors now have web access to market data, company information, and educational materials which greatly reduce inter mediation issues in investing. The online investor gains the facilities and saves time with direct access to Internet trading systems and will have access to 24 hour access to information regarding the stock market information.
How does Internet trading work?
Internet based trading is an order forwarding and executing system providing trading in shares at the Stock exchange. To be engaged in Internet Trading you will have to do the following.
- Sign up an agreement with a Stockbroker.
- The stockbroker gives you a Username and password, through which you can access the order book and place orders through your registered broker.
- You can set up a portfolio so that the value of your portfolio can be updated daily.
- Once you feed the order, the order goes to the brokers trading server and from the broker to The Stock exchange.
- When the trade is executed, the confirmation along with the order number, the trade number and time of execution is sent to you.
What are the advantages of Internet trading?
You will have the facility to trade as and when you want, if you have an internet connection. During times of high market activity, when it is difficult to speak to your financial adviser or the broker firm, you will be able to place your orders without difficulty. It will also allow you to have direct facilities for trading, thereby minimizing client-broker disputes.
Is trading through internet safe?
Online stockbrokers implement security, technology, and fraud prevention methods to provide protection for all users of the online trading facilities. When you open an online trading account, the broker company will give you a secured Username and password.
How to open an online trading account?
To open an online trading account the stockbroker websites provide the necessary forms usually to be downloaded on their websites. It will be necessary to fill the Stock Exchange account opening forms. Next the relevant account opening forms of the Stockbrokers. It will be necessary to provide proof of your identity; proof of your billing address so that you can receive documents and checks sent by the brokers. With regards to deposit requirements for online trading, some firms may request that you deposit a minimum amount in the form of cash to trade using their Internet trading platform. This is done to reduce the credit risk of online transactions. Some stockbrokers may allow limited credit to investors, but it must be settled within three working days. Similarly when you sell your shares, the stockbroker will send a check to that value within three working days.
Trading through the internet is not costly. All stockbrokers who provide online tradingfacilities charge the same transaction fees as brokers who do not offer online trading facilities. Presently online brokers do not charge additional fees.
Online trading does not require any special expertise or any financials skills. However just like making any investment decision, you should make an informed investment decision based on company’s performances whether investing online or offline.
Online trading also provides many benefits to retail investors. The internet has brought to the individual investors what was the absolute authority of large institutional investors and high value investors. Online trading offers direct access to trading and can have access to market information any time of the day. It also allows stockbroker research on listed companies.
Tags: internet trading, buys online, trade online, online stock, online trading, buy stocks, trading options
Posted by Donald Jayasundera (Registered Pharmacist 3149)