What Is Online Stock Trading?

Internet Stock Player

The stock market has gone digital since the 1970’s when the first ECNs or Electronic Communication Networks went live for the major stock markets.  This however had little effect on the average stock investor until just the last two decades.  Before this time most stock transactions were conducted with a retail stockbroker.  A retail stockbroker would guide you in your investments, manage your portfolio, and make your stock trades on your behalf.  With online stock trading, much like the travel agent, this position has been largely sidelined.  With online stockbrokers now numbering in the thousands, most stock investing on every major market in the world is conducted wholly online.  Buying stocks online is no longer something the wealthy do.  In fact discount online stock brokers have opened up the stock market to anyone with a computer and internet access.  With the touch of some keys, opening up an account, one is ready to be buying stocks online, as easy as that.

Online Stockbrokers

Online stockbrokers eliminate the need for retail stock brokers for many reasons. First and foremost is the change in cost.  Online stockbrokers who assist in online stock trading do not charge commissions in most cases.  They make their money solely in assisting you with real-time stock trades.  For this reason the cost of maintaining a portfolio with a retail stockbroker is eliminated.  Instead most investors online investing make trades for a few dollars or less each.  Another advantage with online stock trading is that the sale or trade is made in real-time using ECN technology.  In this way investors investing online can capitalize on quick moving purchases, penny stocks, or even become day traders themselves.  Just a few clicks once you have a funded account and you will have rapid confirmation of your stock purchase or sale.  The final differences that makes online stock trading an advantage is ease of use and freedom to make the trading decisions on your own.  Online stockbrokers compete principally in per trade fee, but also in providing their clients with the easiest online interface and also the most information.  Most online stock brokers assist their clients with online stock trading by making readily available a whole host of information on publicly traded stocks and funds.  This information is much more in depth than one would find in the newspaper and typically includes highly detailed stock reports, company financials, and relevant market and industry news.

Related posts:

1. What Are Online Stock Trading Fees?
2. What Is The Advantage Of Online Stock Trading?
3. How Do I Start Investing?
4. Why Do I Need A Stock Broker?
5. How To Start Investing Online?