SIGN UP

A Guide To Buying and Selling Shares Online

13:30 Thu 16th Jan 2014 |

Buying and selling shares online is increasing in popularity. With the growth of the internet, it is now a more readily available activity for people who are interested in investing their money.


What Is Online Share Dealing?


Online share dealing can also be called ‘online stock trading’ and is simply the buying or selling of shares through the internet. Before the arrival of broadband and other faster technology, this simply meant contacting a stockbroker via e-mail so they could make the deal for you, but you are now able to make the purchase or sale yourself through the use of online services.


What Are The Advantages and Disadvantages Of Online Share Dealing?


With high speed internet and a direct access to the stock markets online share dealing is quicker than the ordinary method. By using an online service you also ‘cut out the middle man’ and have much more control over what you do with your money and stock. Being able to buy and sell at a quicker pace means you can become a much more active trader, and many online brokerage services offer reduced fees for those who trade frequently. You can also have access to level 2 market data, the same level as the professional brokers, meaning you can see the current prices and the variety of traders who are buying or selling.


Online share dealing does have its risks. Firstly, dealing with money online can make you a target for computer criminals. Although the security of online brokerage systems is highly advanced, it is always something to keep in mind. Also, you are not offered any advisory services, so if you want to invest your money efficiently you must have an understanding of the financial markets.


How Do I Trade Shares Online?


You will need a computer with the required technical specifications (most modern computers will be powerful enough) and an internet connection (preferably broadband). There are a variety of different online services to choose from, so it is worth shopping around until you find one that offers the best package for you. You will then have to set up a trading account with the service and you will have your own username and password.


With your trading account you will be able to review your transaction records, watch the markets that interest you and eventually make a purchase or sale. Each service will offer you a specific introduction and guide to its features. However, despite the ease of trading, do not trade recklessly – if you are unsure about a transaction seek advice.
 

Do you have a question about Business & Finance?