Essentials of Online Share Trading

Investing in the stock exchange is one of the best ways to grow your money. These days, online share trading is becoming more commonplace among investors.  It is a convenient way to earn a profit because you can trade anywhere, anytime. If you have been asking yourself, “how can I trade shares online”, then this article will give you the basics of online share trading.


The advantages of online share trading

Investors get a lot of benefits when they choose to purchase shares online. Most investors use an online share market app which they have downloaded into their mobile phone. Here are some important advantages:

  • You spend less money: The stockbroker fee for online stock trading is usually lower compared to traditional commissions earned by stockbrokers.
  • You have more convenience: It is more convenient because all you need to do is to open an account online.  Investors are not limited by time and place. Now, share trading is more accessible and saves a lot of time.
  • You have greater control over your investment: Investors have greater control because they can trade anytime they want. They are also able to monitor their investments, make and instantly implement their decisions.


Ownership Rights that Come with Buying Shares

Whether or not you buy shares online or through a stockbroker, you need to remember that there are two vital ownership rights when you buy shares online:

  • The first is the right to receive dividends.
  • The second ownership right is the right to attend and participate in the annual shareholder’s meeting.


Steps in Buying Shares Online

Now that we know that buying shares online is an easier and more cost-effective way versus traditional methods, there are several steps to help you begin.

Download an online share market app on your smartphone

Many investors are now shifting to mobile platforms to trade stocks.  There are many great apps that allow you to trade stocks with minimal or even no commission fee. Using an app also helps investors scout the most promising stocks and secure the best trades. With these apps, you can easily track real-time quotes, market news, and other relevant information. It is important to find an experienced and reputable online broker.

Know the different types of trades you can make

There are many types of trades that you can do online. Think of them as trading tools that you can use.  For instance, the simplest trade you can do is a market order, which just tells your broker that you will be taking whatever price is presented when your order is executed.  Since it is the easiest trade to execute, it also has the lowest commissions. You also need to know limit orders, all-or-none orders and stop orders. There are also stop limit orders, selling short, and buy to cover orders.

Open your investment account

Opening an account is very straightforward.  Just remember to prepare your identification documents such as your passport and government ID.  You may have to wait a few days in order to activate your account.

Fund your account

Many online trading platforms offer a variety of ways for traders to fund their accounts. You can choose to transfer funds via bank transfer, through credit card, debit card, or electronic payment systems such as PayPal. In funding your account, it is important to check if a minimum balance is required.

Find the shares you want to buy

Finding the shares you want to buy can get a little tricky especially if you have little or no experience.  It is recommended that you ask for expert’s recommendations, peruse analyst reports, news updates, or look for blogs that give investment advice.

Start trading

Now that your account is funded and you have found the shared that you want to purchase, it is time to do some online trading.  Now you can buy and sell shared of desired company stocks with the help of expert tips, graphs, and other analytic tools provided by the online broker.

In starting a buy order, choose a stock by typing in the company name or entering a stock code.  Next, enter the number of shares you plan to buy.

Review and monitor share positions

You need to monitor and keep track of your investments.  This is important so that you know when exactly to sell your shares in order to yield a big profit.

Share your shares

If you decide to sell shares, first decide how many shares you want to share and how much you are willing to sell them for.

This article has given information on all the essentials of online share trading. So next time you ask “how to buy shares online?” you already have a basic idea of what it takes to participate in this endeavour that will potentially increase your wealth.

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