• Breaking News

    The Truth is Online Stock Trading Successful

    Online Stock Trading

    Online stock trading is the process of different selling and buying assets through a brokerage’s internet which is based on the proprietary trading platform. It is a type of model in which everyone can enter their trades into their broker’s system and let their system sell and buy for you. We can say, it is a process by which investors and traders sell and buy securities over an electronic network with brokerage’s system.

    Description of Online Stock Trading:

    Online stock trading is a disintermediation model of stockbrokers, in which there may be another human involved. Simply log on to your broker’s website or use their mobile app and you are just off and running. The use of online stock trading gradually increased dramatically in 1995 with the introduction of high-speed computers and internet connection. Online stock trading includes stocks, bonds, ETFs, mutual funds, future investment, Gold, crude oil, and currencies can all be traded online. It is also known as self-directed investing or e-trading. In this trading, investor trade through an online brokerage firm which are provided with the online trading platform. The online stock trading platform plays a key role because they allow investors to buy and sell these securities as mutual funds, options, equities/stock and fixed income. The Online stock trading platform is the tools to track and monitor securities, indices, and portfolios as well as in performing real-time streaming quotes, research tools and up-to-date news release, which are very important and necessary to trade profitably.

    Trading Platform:

    In online trading, traders and investors have to call their brokerage firms and request them to make a trade for them. If Aslam wanted to purchase 70 shares of Intel, then he would call his broker with a buy order request. Then the broker would let Aslam know the market price and confirm the purchase order. In this process, if the investor is making a limit over, then the broker has to confirm the price limit. If Aslam has multiple Investment accounts, then how long keep the order open for and also what account to purchase the shares in. During this process of online stock trading, the investment representative must also confirm the commission cost for making the trade. When everything has been established during this investment, then the broker would place the trademark in the system which is directly linked to trading floors and exchange such as Pakistan stock exchange (PSX) and Pakistan Mercantile Exchange (PMEX). PSX and PMEX are the top online stock exchange in Pakistan. The client will receive a trade confirmation by mail and monthly statement account which will show the list of his investment. Due to these statement account, if the Aslam wanted to transfer some payment from his trading account to his checking account then he would have to call in to make that transaction.

    Investment Risks:

    In all investments including online stock trading, there is a chance of risk of investment fraud. Risk of investment fraud can increase for brokers where the investor does not have a relationship with trader and broker can easily be located in different restriction. Due to this reason, some of the regulators always warn their possible investors to research the online brokers they plan to assure those firms, especially which are licensed within their state, provincial or national jurisdiction.

    Benefits of Online Stock Trading:

    The Benefit of online stock trading is the improvement in speed of which transaction can be easily settled and executed because there is no need for proper based documents to be filled, copied and entered into an electronic format. When an investor makes an order, then this order is placed in a database which checks for the best price by searching all the market exchange that trade the stock in investor preferred currency. This exchange matches the best buyer with the seller and sends confirmation of both seller’s broker and buyer’s broker. All this process is done within seconds of placing a trade, compared to making a phone call which has to go through several steps.


    In online stock trading, here are not all securities available to be traded online. It is depending on your broker. Some brokers may have required a call to place a trade on any stock trading on pink sheets and select stocks trading over-the-counter. All the brokers are not facilitate trading in commodities and currencies through their online platform. Due to this reason, the online stock exchange is very important because the trader has to understand what a broker offers before signing up with the trading platform.

    No comments