The Advantages of Online Stock Trading
Once upon a time, the only way to trade stocks was through a stockbroker. These high-powered men and women would take stock orders, make suggestions and then handle the entirety of the actual buying and selling of stocks. With the proliferation of the internet, brokers have become a commodity that is only used by those who intend to trade large quantities of stock – usually either very wealthy individuals or businesses. The average person no longer needs a broker because they can trade online. There are numerous benefits to online stock trading, especially for casual traders.
The first benefit of online stock trading is cost. Brokers make their living working with stocks and bring advanced degrees in business as well as years of experience to trading. All that can make them very effective, but also very costly. Often they will charge not only a brokerage fee, which is an up-front fee for their services, but often they take a percentage of any earnings. They may also have other fees added into the exchange, depending on the stockbroker. Online brokerage firms charge flat rates for each transaction, which are usually extremely inexpensive by comparison.
The second benefit of online stock trading is that you have full control. This was always one of the biggest complaints when brokers held a stranglehold on the market. They would often refuse to perform a trade they thought was a poor investment. If they saw any flaws in an investment, they had full authority to deny the trade to their clients. While this could save the potential client from making a bad investment, it could also prevent them from taking a risk that would pay off enormously. Online stock trading removes the middleman between traders and the stocks they want.
The third benefit of online stock trading is immediacy. Using the daisy chain of investor to broker to trade to payoff was sometimes too time consuming to execute the trade in time, which is a danger in the world of stocks where time is money and seconds count. Trading online allows immediate trading for the investor and real-time updates regarding a stock’s performance. The lag between the investor's purchase and the actual time the stocks are bought has been reduced to nil.
The fourth benefit of online stock trading is being able to make as many or as few trades as you desire. Brokers usually required a minimum trade allotment, which meant that an individual could not make a single trade for a paltry sum. They were forced to adhere to the broker’s guidelines. This prevented casual traders from being able to trade whatever volume of investments they wanted.
The stock market has come a long way from the archaic days of faceless men in pinstripe suits making deals in boardrooms that toyed with the finances of the entire country, if not the world. Now it is just as easy for anyone to trade online while sitting in the comfort of his or her own home. The benefit of online stock trading is that it wrests control of the market from the brokers and puts it, along with his or her financial future, into the hands of the individual.
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