Gone are the days when a stock broker was the only means for trading of stocks. Its a history that the stock brokers would handle the entirety of stock taking taking orders (buying & selling of stocks) and even acting as advisors to average persons intending to take a dip in the equity market. With the advent of internet channel of communication, online trading facility got possible and today an average person can buy and sell stocks while sitting at home and that too without intervention of any stock broker. Of course, stock brokers havent vanished from the scene, but their utility has been confined to persons or businesses intending to trade large quantities of stock.
Today financial services companies offer online/web based trading module which means that the investors shall not be required to come to the centre for trading, but shall be able to execute trading of stocks from the comforts of their homes or workplaces. Even the financial companies and brokerage firms provide call centre facility to the investors on a highly secured and technological platform. This means that an investor can reach to the companys or firms call centre through logging of PIN via mobile or and landline phone.
Making best use of technology, the companies provide online technical advisory services. Not only this, online trading limits (Buy/Sell) are also extended to the traders. The trading limit is extended on basis of the investors holding or credit balance in his ledger accounts.
Whats the cost involved in the online trading of stocks? This is of course a meaningful question. When we look at the archaic days of stock trading, we find stock brokers as an expensive means of trading of stocks. Often they charge not only a brokerage fee – an up-front fee for their services, but also take a percentage of any earnings. Besides, the stock brokers add up some other costs on one pretext or the other. In comparison, financial services companies or online brokerage firms charge flat rates for each transaction, which are usually very inexpensive.
The nature of stock market demands perfect timing to strike a deal. Here time in real sense is money and every second matters. Executing a trade transaction through a stock broker would be time consuming. Online trading modules give investors access to real-time updates regarding a stocks performance and this way facilitates instant trading of the stock. Precisely, this online trading facility has removed pauses between the purchase and the actual time the stocks are bought, which otherwise would heavily cost to the investors.
Self control is another huge advantage in online trading. Brokers would use their sweet will to execute a deal on behalf of an investor. While having an iron grip on the market, they would often refuse to execute a trade they thought was not good investment. They would exercise their full authority to deny a deal to their clients if they observe any imperfection in an investment. On one hand, this broker attitude could save the investor from losing money, on the other it could also prevent him from making enormous profits.
Online stock trading gives you full control of exercising your sweet will of buying and selling of stocks at any time. Its also worth mentioning that it removes a minimum trade allotment bar, which means that an individual can make a single trade for a paltry sum also. Precisely, the traders through online mode can trade whatever volume of investments they want.
So, online trading facility has armed you as an investor with the power of executing your deals (buying/selling) in the stock market without any constraints and middlemen. You dont have to remain at the mercy of a stock broker to shape up your financial future. All the benefits of online stock trading can be summed up in this way: It wrests control of the market from the brokers and puts it into your hands.
But a word of caution is inevitable here. Even as stock trading through internet mode has removed constraints discussed above, its advisable to have thorough knowledge of the stock market before making any investment. Get yourself acquainted with the lows and highs of the market. If you are first time intending to exercise the option of online trading, then start with a humble investment. Dont shy to take advice from financial consultants. After all, its your hard earned money which is at stake. Nobody wants to lose it.
(The views are of the author & not the institution he works for)
Lastupdate on : Fri, 10 Jan 2014 21:30:00 Makkah time
Lastupdate on : Fri, 10 Jan 2014 18:30:00 GMT
Lastupdate on : Sat, 11 Jan 2014 00:00:00 IST