React To Market Changes With Online Stock Trading

As the financial crisis spreads its tentacles around the globe

, online stock trading is becoming an attractive option because of the speed it offers to react to changes in the stock market while enabling you to retain control over your investments. Online trading is emerging as a way of coping with the roller coaster markets and taking immediate advantage of opportunities that spring up all of a sudden. The speed with which corporate information is leaked and spread also contributes to the need for instant action on the part of the active stock market investor.

Trading online is the answer of the digital age to the ups and downs that are part and parcel of stock trading. In the past, the way to invest in the stock market was to acquire the services of a stock broker who would then handle the buying and selling of shares on your behalf in the stock market. For this service, the broker would charge a fee, earn a commission or both. If you wanted to control your investment decisions, it would take time to communicate your instructions to the broker. If you wanted your broker to react quickly to changes in the market, you would have to relinquish a large part of your control.

In today's world, the answer seems to be opening an online account with an online stock brokerage, a process that takes minutes. You can choose from a variety of online accounts, and the brokerage charges a fixed fee for every trade plus fees for other services such as the processing of dividends. Opening an account will require you to deposit funds in the account before you are allowed to trade. Once you have an account, you can trade by phone, mobile or online.

The online brokerage opens an account for you which you can access to view different types of information. With your online account, you can see share prices on the stock exchange in real time and make your decision about which stocks to buy or sell via your computer. It is this facility of online share trading that makes it especially attractive to investors because they maintain control over their investments. Earnings such as dividends issued are transferred to your account, which functions much like an online bank account.

While most shareholdings are now done online, many investors still trade using actual share certificates. The online share trading companies also have provisions for this type of trade by enabling investors to register their certificates as part of the account. Online trading is regulated by the government making it a fairly secure way of investing in the stock market. Taxes and other legal issues are also adequately addressed by the online brokerage firms.

Online trading companies offer their members other benefits like company profiles, stock trends and market developments to help them arrive at intelligent investment decisions. Online stock trading may not guarantee that you pick the right stocks to buy or sell but it can certainly make the process a smoother and quicker one.

by: Albert Camus

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