Investing online only became popular in recent years, before there was no such choice. Online trading is an offshoot of the popularity of the Internet. If once can shop clothes, books or what-have-you online, why can’t one buy or invest on stocks as well? Now online trading is one of the most popular activities done over the Internet.
Before one can invest in stocks online, one should first open a brokerage account, which allows a person to purchase stocks, bonds, mutual funds, and other investment tools. Then the next step is to find a stock broker that could handle your investing requirements. Be prepared to pay fees for both steps. The fee you pay the stock broker is called commission, the amount depends on the type of brokers you choose, traditional or discount broker. Once you have done both steps, you are ready to begin investing in stocks online.
The online stock investor is no different from any stock investor, except of course that the former is doing the investing with a click of a mouse or by pressing a computer key while the latter does it in person in the office of his/her stock broker or on the trading floor itself. Thus the same set of principles that other stock investors follow also apply to an online stock broker, who needs to apply the same amount of prudence, due diligence and, sound investment strategy.
Online stock trading or investing offers a lot of advantages, foremost of which is convenience. Online trading websites allow the investor to monitor or keep track of his/her potential investments and analyse their performance. These websites also have features that allow traders to actually watch how stocks are being traded and how the share prices are fluctuating as well as calculate losses and gains. Most online trading sites also allow the user to view the detailed profile of a company and compare its performance against other companies within the same industry.
There are disadvantages in online stock trading also. One of which is that since it is done via the Internet, it is highly dependent to technology. There would be instances when the server of the stock brokerage firm would be down or cannot be accessed. In instances such as these, the investor can call the firm’s phone number (usually toll-free), so there will be no disruption in the stock investment transaction. This phoned-in trade usually comes with a minimal fee. Online traders should also be careful since they are transacting online, once you have keyed in or emails your transaction, it is hard to undo or un-transact it.
Online stock investors usually deposit funds into a so-called share account, which are use to make the investments. The online trading website or the stock broker, upon the instruction of the investor, can either buy or sell a stock. Some of the costs that go with investing online include site tariffs or commission, capital gains taxes and stamp duty. A stock investor should make sure that there are no hidden charges and that all transactions costs or fees are transparent.
source https://www.stockmarket.today/news/getting-started-with-investing-in-stocks-online/
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