Online trading has exploded over the past couple of decades, since the beginning of companies like Datek Online (remember them?). Its popularity was made by the ease of use, cost of trades, and increasing number of platforms on which you could trade.
There are many other reasons why so many people are doing it, but let’s check out what I think are the top 3 reasons.
Better level of control for commissions, trade executions and transparent pricing
One of the key things that caused many people to go the online route was that the commissions for brokers were already through the roof. The lower level of commission also made smaller trades, micro-accounts and more frequent trading possible, meaning that ordinary people could access the market directly for purchasing stocks, bonds, contracts & much more.
Instead of calling your broker, you could open your browser or start up your trading apps to get the best current pricing; decide on whether you want to go long or short; and set the market, limit or stop limit orders for the stock you wanted to purchase, allowing you to dictate your execution pricing and your total purchase/sell cost.
A better level of control effectively means that you will have more control over your profits or losses. This new trading phenomenon wound up working for many people, and encouraging dozens of online trading companies to spring up seemingly overnight.
Accessibility to your trading accounts 24/7/365
I’m not a frequent or avid trader by any means, but even I enjoy those advantages of being able to access the account pretty much where, when and how I want. If I had to rely on a standard broker, who may be unavailable when I decide to call, to buy and sell everything for me, there would be a limit to how quickly I can make an investment. In the financial world, time is money and every second counts.
So, if you trade online, you will make all of the trades yourself. You can do everything at the exact second you want to. Even the smallest delay in buying or selling can cost you a very large amount of money. But you will need to learn about online trading from someplace like Online Trading Academy, you will never lose money because your broker was unreachable at the time you wanted to make a trade.
Most modern brokers offer a variety of platforms to access your accounts: web-based sites, apps on your phone or pads, even proper software for your PC or Mac. And you will still be able to dial-in on the old phone, and make trades for an extra fee.
Look for a good online stock broker
Really, check out the offerings and decide what you want or need. You will need to decide what products you want to trade: stocks, bonds, forex, contracts, commodities, etc.; then consider what kind of tools you actually need: will you be trading via web or app or via a full software application.
Lastly, don’t forget to look at the additional research brokers these days offer. Many offer lots of research tools, reports, stock scanners, and much more for no additional fee; while others charge bare-bones fees for stock trades, then have an a-la-carte attitude to the many services available, so trading costs will be low until you need to pay for additional services. However, most fees are minimal compared to what you would pay to an actual traditional broker.
Check out this video for more information. And search through this site for more ideas on use online stock brokers for trading. Or perhaps you have a favorite you’d like to share.