What is Online Trading?

If you have ever watched a classic film, you may recall images of men smoking cigars and watching a ticker tape print out from under a glass globe. That paper trail was how those guys got their value information regarding the stock market trades of the day.

They would then contact their representatives and tell them to get out their and buy and sell based on their demands. Paper trails begone as online trading is the way most people can now work on being their own financial fat cat.

What is online trading?

Online trading is the process of buying and selling stocks directly over the Internet.

Investors do their own research and have full control of when they choose to buy and sell their investment properties. The transactions occur through a brokerage internet based proprietary trading platforms.

If you have a money manager, they may conduct trades that way (based on your instructions) or if you opted to eliminate the middle man, you can do it yourself.

The growth of online trading

Online trading has increased in popularity substantially over the last decade. Circa the late 90’s, one needed to struggle to name an online brokerage house. But now, do to their popularity and huge amounts of marketing money, many American’s can easily name three by memory.

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With online trading, individuals can become the masters of their own financial domain.

Fees associated with online trading

After opening an account and stocking it with money, the trading can begin. Online trading offers a fixed, low fee for the ability to trade online. That means that you can open your own online trading account and regardless of if you trade 10 shares or 10,000, depending on the brokerage firm you use, you will be charged the same amount. Typically, there are no maintenance fees associated with maintaining an online trading account. 

Although it may feel like a video game, it is important to remember that online trading does occur in real time and with your real money. Before jumping on the online trading bandwagon, make sure to investigate and conduct thorough research to be your best personal financial advocate..

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GOBankingRates Staff

These articles are written by the in-house GOBankingRates team.

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What is Online Trading?
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