7 Benefits of Online Trading

Nutan Gupta

25 Sep 2017

Untitled Document

Online trading is an act of buying and selling financial products through an online trading platform. Stocks, bonds, options, futures, and currencies can all be traded online. These platforms are normally provided by internet based brokers and are available to every person who wishes to try and make money from the market. You can educate yourself on your investment options, place orders to buy and sell, and possibly make (or lose) a considerable amount of money without ever speaking to a broker or leaving the comfort of your home.

Online trading has a lot of benefits; here are the 7 main benefits:

It is convenient

When it comes to online trading, you only need to open a trading account via internet and you’re good to go. You’re not bound by time and place as long as you have an internet connection. Hence, online trading is convenient and accessible from anywhere with limited hassle. It also saves time.

It is cheaper

In online stock trading, the stock broker fee which you will have to pay is lower when compared to the commission charged by traditional method. If you trade in a sufficiently large volume of stocks, it is possible for you to be able to negotiate your broker’s fees.

You can monitor your investments anytime

Online trading allows you to buy or sell shares according to your convenience. It offers advanced interfaces and the ability for investors to see how their money is performing throughout the day. You can use your phone or your computer to evaluate your profit or loss.

It almost eliminates the middleman

Online trading allows you to trade with virtually no direct broker communication. Apart from reducing the overall trading cost, this benefit also makes the trading hassle free, making this service much more lucrative.

Investor has greater control

Online traders can trade whenever they wish to. On the other hand, in traditional trading, an investor may be stuck until he or she is able to contact their broker or when the broker is able to place their order. Online trading allows nearly instantaneous transactions. Also, investors are able to review all of their options instead of depending on a broker to tell them the best bets for their money. They’re able to monitor their investments, make decisions and buy/sell stock on their own without any outside interference; thus, giving them greater control over their investment.

Faster Transactions

Online banking is fast and efficient. Funds can be transferred between accounts almost instantly, especially if the two accounts are held at the same banking institution. All it takes to be able to buy or sell stocks is a single click of the mouse. Through this, a quicker exchange can be made which may also ensure quicker earnings.

Better understanding of one’s money

This is a hidden advantage of online trading which you wouldn’t want to pass up on. Just like conventional stock trading, you can predict the market behavior and use this to predict a rise or fall in price of the stock. You’ll be handling your own finances and be responsible for them. Over time, you become more experienced in understanding the market, and good investment opportunities from the bad ones. This knowledge about money is very useful, and having this on your resume makes you more marketable to companies looking to fill a well-paying position in the finance department. So while making a quick buck, you also manage to become financially smarter, in both your professional and personal life.

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mutual-fund

Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 


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7 Benefits of Online Trading

Nutan Gupta

25 Sep 2017

Untitled Document

Online trading is an act of buying and selling financial products through an online trading platform. Stocks, bonds, options, futures, and currencies can all be traded online. These platforms are normally provided by internet based brokers and are available to every person who wishes to try and make money from the market. You can educate yourself on your investment options, place orders to buy and sell, and possibly make (or lose) a considerable amount of money without ever speaking to a broker or leaving the comfort of your home.

Online trading has a lot of benefits; here are the 7 main benefits:

It is convenient

When it comes to online trading, you only need to open a trading account via internet and you’re good to go. You’re not bound by time and place as long as you have an internet connection. Hence, online trading is convenient and accessible from anywhere with limited hassle. It also saves time.

It is cheaper

In online stock trading, the stock broker fee which you will have to pay is lower when compared to the commission charged by traditional method. If you trade in a sufficiently large volume of stocks, it is possible for you to be able to negotiate your broker’s fees.

You can monitor your investments anytime

Online trading allows you to buy or sell shares according to your convenience. It offers advanced interfaces and the ability for investors to see how their money is performing throughout the day. You can use your phone or your computer to evaluate your profit or loss.

It almost eliminates the middleman

Online trading allows you to trade with virtually no direct broker communication. Apart from reducing the overall trading cost, this benefit also makes the trading hassle free, making this service much more lucrative.

Investor has greater control

Online traders can trade whenever they wish to. On the other hand, in traditional trading, an investor may be stuck until he or she is able to contact their broker or when the broker is able to place their order. Online trading allows nearly instantaneous transactions. Also, investors are able to review all of their options instead of depending on a broker to tell them the best bets for their money. They’re able to monitor their investments, make decisions and buy/sell stock on their own without any outside interference; thus, giving them greater control over their investment.

Faster Transactions

Online banking is fast and efficient. Funds can be transferred between accounts almost instantly, especially if the two accounts are held at the same banking institution. All it takes to be able to buy or sell stocks is a single click of the mouse. Through this, a quicker exchange can be made which may also ensure quicker earnings.

Better understanding of one’s money

This is a hidden advantage of online trading which you wouldn’t want to pass up on. Just like conventional stock trading, you can predict the market behavior and use this to predict a rise or fall in price of the stock. You’ll be handling your own finances and be responsible for them. Over time, you become more experienced in understanding the market, and good investment opportunities from the bad ones. This knowledge about money is very useful, and having this on your resume makes you more marketable to companies looking to fill a well-paying position in the finance department. So while making a quick buck, you also manage to become financially smarter, in both your professional and personal life.

Have Referral Code?