A-Z of Online Stock Trading
By: will smithston | Posted: 16th June 2007
A stock market is a place where stocks, securities and derivatives are
traded. The stock exchange is a meeting place for investors, traders
and brokers. It is important to differentiate between stock trading and
investing. Stock trading is not investing and investing is not trading.
Stock trading is defined as the buying and selling of stocks, shares,
currency, futures and options, derivatives and other financial
instruments. Stock trading is done by two market forces called “Bulls” and
“Bears”. In stock markets these bulls and bears are found everywhere. While
a person who feels that the market is going to rise is called a bull, a
bear assumes that the market is going to go down.
Over the years the advent of the internet has made life easy for the
stock traders. They do not need to go to the stock exchange or a broker
and can trade stocks on the internet itself. Almost all the commercial
banks furnish the facility of online trading to their customers and the
billing is generally done on a quarterly basis. The action of buying
and selling of securities through the internet or through a broker’s
software is called online trading.
How to get started online?
-Select an online stock broker.
-Filling in your registration form.
-Joining fees
-Depositing money in your account.
-Start trading.
Requirements
All you need is an internet connection and a share broking firm’s
registration that will get you going. You are free to place any order or
sell something at your leisure and the transaction commanded by you will
be executed in the market hours. The trader or customer must submit his
credit card particulars online and thus, buying and selling can be done
without physically involving the broker. You will receive conformation
of the transactions done and can check your account for specific
details anytime. All this can be done from the comforts of your home itself.
Benefits of online trading
Reduced stock broker commissions
One of the main attractions is a reduced brokerage. Though many brokers
also give the facility of commission on profits-only internet allows an
investor to do away with them completely. Thus, one can save a huge
chunk of broker commissions through participation in online trading.
Enlarge your portfolio.
As a trader in a stock exchange one may not be able to include various
assets in his portfolio due to the broker’s advice. But on the internet
one can be free to choose whatever one likes.
Online is informative
Online trading can be very informative. One has access to many charts,
graphs, statistics and a wide data about a company. This can help a
person to carry out technical analysis and make investment decisions
thereafter.
Volume of trade
A broker may have a restriction regarding minimum shares you can buy
or sell whereas on the internet one can carry out trade as one likes and
deal in huge or small quantities of stocks.
Time benefit
As the value of a stock keeps fluctuating a person can trade shares
immediately on the internet. In a traditional manner several phone calls
have to be made to the broker, a price has to be fixed etc.
Thus internet has removed the hassles of traditional stock trading and
is also a smarter way to carry out trade.
Written by Will Smithston. Searching for tips to achieve financial
freedom? Join the money making discussion forum at
href=http://www.teamwealthbuilder.com>TeamWealthBuilder and make your
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Tags: stock market, trading stock, particulars, quarterly basis, stock trading, stock markets, financial instruments, commercial banks, advent of the internet, stock traders, stock exchange, stocks shares, derivatives, conformation, futures and options