Among the many revolutionary changes brought about by the advent of the Internet is online stock trading. Once the exclusive preserve of the rich and the wealthy, the stock market has now become a place where even the common man can play a part. Investors today can use Internet client-server technology to trade stocks anywhere, anytime they like. Just a couple of mouse clicks and the client is through with a thousand-dollar transaction!
There are several ways in which one can participate in online stock trading. One can use an online broker, or do it himself.
There are two types of online brokers: discount and full-service. The former are licensed individuals who have direct access to the share market. They neither give you advice nor research the best options. They just order the stocks you want at a discounted price. They earn no commission but make money by selling mass amounts of stock.
In comparison, a full-service broker offers many more stocks. They act as your personal agent in all share-related activities, such as advice in buying shares, creating a safe investment portfolio, and offering investment advice. Commissions being their main source of revenue, they work hard to satisfy you. So they do a lot of research on the best stocks and investments for you, and hope you will stay with them.
As stock trading is a complex thing, you should do your homework before taking the plunge online. Take into account how frequently you trade, what other services might interest you, how reliable the trading system is, whether it is difficult to log on when the market is active, and other variables. As hunch or intuition may turn out to be misleading, try to be conversant with the market’s state-of-the-art trading techniques and strategies. Try to read the quarterly or annual reports of the companies to know what they are doing with your money. When in doubt, ask your stockbroker.