With the world going digital, the possibilities of conducting business on the virtual screens of our computers and mobile phones have increased tremendously. As long as we have a smart, internet-enabled phone, there is nothing that cannot be achieved. Whether it is drafting important business mails, accessing your bank accounts or even sending and receiving money, everything is now possible simply by logging on to the internet. In fact, one of the most popular online activities to have risen in the recent years is that of online trading. Yes, online trading has become a realitywith new investors taking over the share market every single day. Before we assess the benefits of online trading, let’s first understand what it means to trade online.
What is online trading?
Online trading simply refers to the act of purchasing and selling financial products, securities and assets through an online platform. Such trading platforms are made available by all leading financial investment firms as well as internet-based broking companies through which their clients can conduct the trade of several different financial products be it equities, stocks, mutual funds and commodity trading. The online trading platform helps investors and traders purchase and sell their equities and other financial instruments. Anyone who wants to trade online can make use of this platform.
Benefits of online trading
Now that we have defined what is online stock trading, let’s take a look at its many benefits.
Online trading is convenient: Many investors are swayed by beginner’s luck when the first enter the equity share market. This means, that most investors end up profiting from their first few investments. As a result they start believing that they have mastered the art of investing and start investing large amounts of money. It is necessary to first test the waters. Ensure you start with investing smaller amounts of money and then gradually increase your investment amounts as you gain more knowledge about how the share market functions. To start trading online, all you need to do is open an online trading account on the internet and you can begin conducting your trade. It doesn’t matter where you are or what time it, as online trading can be conducted from virtually any corner of the world, at any given hour, 24*7. So long as you have an internet-enabled device, you can conduct trade anytime, without leaving the comfort of your home. Online trading is therefore convenient, hassle-free and can be accessed from anywhere. It also saves your time.
Online trading significantly eliminates the need of a middleman: A few years ago, it was impossible for one to conduct any trade without either calling or meeting with their broker. You had to relay trading instruction either via phone or in person, but this need is almost eliminated today. The easy accessibility of online trading has opened up many possibilities for traders who may not have had the connections or finance to work with full-service brokers. Online trading enables one to purchase and sell stocks without speaking to any brokers.
Online trading is a lot more economic: It costs more money to have a broker execute trades on your behalf. Yes, you will still be bearing a cost for conducting online trades; however the associated costs would not be as high. With more and more brokerage firms providing online trading facilities, the costs continue to drop. You could even earn several discounts if you conduct trade over a certain amount online.
You have greater control over your investments: Unlike traditional trading in which an investor could be stuck until he/she could get in touch with their broker, online trading can be conducted at any time. The transactions are almost instantaneous and investors can review all their investment options on their own. They no longer have to depend upon their brokers to provide them with inputs about the best investment instruments. Investors can monitor their investments and make informed decisions regarding the purchase and sale of their stocks on their own. This elimination of outside interference gives investors a far greater control over their investment decisions.
Online trading enables real-time monitoring of your investments: Online brokerage sites are known to offer advanced interfaces through which investors can keep a check on how their stocks have been performing at any given hour of the day. The investor simply needs to log in to his account on his computer or mobile phone and see any gains or losses incurred during the day, in real time. Furthermore, online brokerage platforms also provide relevant news about finance along with research reports. They also provide a platform for analysing your investments.
Online trading enables faster transactions: The process of conducting trade online is both, efficient and fast. You can transfer funds between accounts instantaneously, and conduct all your purchase and sales of stocks simply by clicking a few buttons on your keyboard. Online trading facilitates quicker transactions which further ensure quicker earnings.