Online stock trading is among the many revolutionary changes brought about by the internet. As a result, stock market trading , once the exclusive area of the rich and wealthy, is now engaged in by the common man. Investors today are equipped with cheap internet client-server technology enabling them to trade stocks anywhere in the world, at any time of their own choosing. A few mouse clicks and the client has just finished a thousand-dollar transaction online!
Two Ways To Do Online Trading
There are at least two ways to do online stock trading. You can use the services of an online broker or you can do it yourself. You must also know the two types of online brokers available: discount and full-service. Discount brokers are those licensed individuals who have direct access to the share market. They don’t give you any advice nor do research for you to get the best options. What they do is just order the stocks you want at a discounted price. These types of brokers don’t earn any commissions but they make money selling mass amounts of stocks.
A full-service broker however offers a lot more than just order stocks. They act as your personal agent in all trade-related activities. They can offer you their advice in what stocks to buy. They can create your safe investment portfolio by offering their investment advice. Commissions being their main source of revenue, they work hard to satisfy you. So they do a lot of research on the best stocks and investments for you in the expectation that you will stay with them.
Whatever the type of broker you choose, still you should make the final decisions carefully. After all, it’s your own investments. Before taking the plunge to online stock trading, do your homework first because stock trading is a complex thing. Your hunch or intuition may turn out to be misleading. Do some research yourself to find out how reliable the trading system is and find out what variables affect your online trading. Better yet, you may also want to read the quarterly and annual reports of companies that you would want to buy shares into. If you have any doubts, you can always ask your stockbroker.
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