Jul 07

Slippage

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Online trading affords the buyer with the best possible means of avoiding slippage. Slippage is a pretty simple concept to get your head around but difficult to avoid if you choose to use a traditional brokerage. Any trader who relies on selling and buying quickly in order to avoid sudden changes in stock prices is well aware of the concept. There are various forms of slippage but for the sake of this article I will be keeping it pretty simple and to the point. Understanding slippage in its most simple form can help you make the right decision in what services to use to purchase stocks when trading online.

Online trading Let’s have a look at how slippage works with a simple example. If you are looking through current stock prices and you come across a share that is currently selling for five dollars and you decide to buy one hundred of them (costing five hundred dollars – or so you think). You then approach a brokerage service in order to conduct the transaction for you. The brokerage service gets all of the particulars and collates them in order to submit them to market specialists to make the purchase. This can take a couple of hours. By the time the broker has got all of this information collated and sent off the share may have jumped to six dollars per share. Your initial price of five dollars is now not available to you. For the same volume of shares you will have to pay six hundred dollars.

In this example the slippage is one hundred dollars. That is why trading online using the right methods can help reduce (or avoid) slippage. If you managed to purchase your shares while they were five dollars you would have made one hundred dollars instead of becoming a victim of slippage.

Jul 07

New Institutions for Online Trading The current online trading industry is in upheaval. This is in large part due to the down turn in stock prices and its gradual clawing back at the whim of the global economic crisis. People are looking for a change and don’t want to pay exuberant brokerage fees to trade online. That is where the new wave of online brokers comes into the fold. Many of the new brokerage institutions that specialise in online trading have disposed of the outdated methods that were employed by brokers in the past. Many have turned to a flat fee based on the amount you intend trading. New brokers are also offering a relatively new trend in the industry known as Straight Through Processing (STP).

This negates the need of slow manual processing methodology. It ensures that your trade goes straight through to the market and ensures you get the best price for the stocks you want. Manual processing was often slow and by the time the broker had collated all of the orders for a specific stock – the stock had lost (good for the buyer) or gained points (bad for the buyer). This can also be a curse in that because of the speed of the transaction you will have no time to actually change your order to best suit your requirements. STP puts a little more power into the hands of the buyer rather than the broker. However, it is important that you do not make any mistakes in the order.

Don’t be afraid to utilise the services of a new brokerage institution. You can save yourself thousands of dollars in fees over the course of your share trading career. Because online trading is a relatively new method of conducting share trades; it may be in your best interest to use a new service that is competitive and innovative.

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Jul 07

Being involved in the stock market can be a little risky at the same time overwhelming. Risky in the sense that you may lose everything in just a second if you have missed a simple stock but overwhelming because you can multiply what you are earning also in just a second.

Virtual Online Trading To avoid losing everything, you can practice how the stock market works through the use of virtual online trading games. This is just like the real trading exchange in the stock market industry except that you are using virtual cash in order to participate and exchange stocks. This is also called by many as the Stock Simulator. You can trade stocks using the real prices on the market so that you can practice the game of stock market before venturing in the real risky world of the stock market industry.

These Virtual Online Trading games have symbols that change real time. Some real time quotes would include the stocks of AMEX and even the NYSE (New York Stock Exchange). The stocks are also updated every second so that the one participating in the game would still be on track and not left behind and have an updated exchange rate as well.

These games would help you to be prepared as to what you have to do in cases where the virtual stocks would go down. This is like training before joining the real thing. Many beginners of the stock market are using these games to broaden their understanding of the world of stock exchange. Some of these games also have forums where the gamers can ask any questions relating to stock exchange and get answers from experts to help you confidently earn that exchange once you are ready for the real world of stock market .

Jul 06

Online Trading Online trading is a high risk business. However the risk is commensurate with the eventual monetary gains. Risks associated with online trading are relevant to those you can control, the economic climate and the specific business that you have invested in. If the business you have invested in suddenly announces record losses then there is a good chance your money will have halved (or worse). The current economic climate is a good indicator of how stocks fluctuate based upon the financial situation of the planet. Whilst trading online may be an easy way to buy stocks – it is this simplicity that can land you in hot water.

Because it is so easy to purchase stocks online; it is too easy to over commit. If you think a stock is at the right price to buy then you might get carried away and spend a lot more money than you would have otherwise. This is another thing that is a disadvantage when trading online – you don’t have a support network or advisors letting you know when to buy or sell. You are alone (for the most part). It is too easy to make a poor decision which leads to an eventual loss rather than gain. If a business that you have invested in has no chance of recovering fiscally then you have no chance of making back your money.

You are also at the whim of your broker. Some brokers require a minimum purchase before they will enable you to purchase stocks. They are also expensive to employ. Their pay is not based on how well the stocks are performing – they get paid either way. This is why they are more than happy to allow you to make decisions for yourself rather than giving you proper guidance. Some brokers even go as far as charging you for not trading enough.

Jul 02

Trading stocks online has a bevy of advantages (and disadvantages). Advantages include being able to check your stock portfolio anywhere as long as you have an Internet connection, absolute control over your portfolio, access to up-to-date information, competitive fee structures and the ability to access different markets. Even if you don’t have access to a computer at your finger tips while you are travelling; you can always use a cell phone. Online trading can give you accurate data on how different stocks are performing so you never have to miss a bargain.

Online Trading Because online trading is such a massive market there is a lot of competition between brokers to get your business. Brokers are constantly out doing each other in the form of fee reductions, extra functionality and conglomerating services into a single access point. Instead of chasing data when attempting to make an informed decision you can just go to a single place to get all of the information you need. Some online brokerage services even send you messages to your cell phone that warns you of when may be a good time to buy or sell particular stocks. If you have a smart phone you make the transaction the second you receive the message.

The competition between brokers is not the only advantage of having multiple brokers available to serve you. It is also a massive source of information in itself. You can get real advice from multiple sources. Because of the inherent fluctuations in stock prices that can change within minutes – having people who cast a human eye over the data to ensure that their own information is up to date can mean the difference between purchasing a stock that will never recover and purchasing a stock that may double in value over the course of a day.

Jul 01

The Internet has greatly changed the way we live in this new generation. It has definitely changed and revolutionized the way we do business and interact with our potential customers.

Online trading is all about buying and selling stocks. Conducting online trading allows investors to have a careful calculation of the stocks at hand and this allows the investors to analyze the data in a timely manner.

How it online trading works

 Online Trading When a business earns from its capital, it shares the earning to the stockholders through dividend. Stockholders are people who buy stocks in order to invest more on the business. The business also has an option to save the earnings and invest on something to gain more from it.

Brokers would buy and sell the stocks through an exchange. Brokers are persons licensed to trade stocks, they can be on the trading floor or they can do business over the phone. An exchange can be compared to a warehouse where people buy and sell shares and stocks. These exchanges are like auctions and others are conducted over the phone or electronically.

You would need an online broker when you decide to buy and sell stocks online. You will be the one to decide which stocks to order and to sell and you will be the one to request for the trades. Some brokers would require a minimum investment before they begin the trading.

Having an exchange of stocks online can be beneficial since the processes can be don fast compared to the traditional trading. However, you should also be wary of the scams which you can find all over the internet. They are sometimes on a chat room and once they have the stocks they dump it and eventually the investors would lose money.

Aug 19

Online Trading FAQSHere are the most common Online trading FAQ’s.

•    What is the meaning of online trading?

Online trading or internet trading is nothing but the buying or the selling of various securities with the help of internet. It enables any client sitting in any part of the country to conduct and execute a trade with the assistance of the internet.

•    Since when did SEBI allow online trading?

In the year 2000 and in the month of January, SEBI gave the permission to the stock brokers letting them make use of the internet in order to conduct online trading. But this could be done only through the registered stock brokers.

•    Why is online trading preferred to offline trading?

Online trading or internet trading enables a person execute the trading without any time delays and with all the safety precautions needed to execute a seamless transaction.

•    What is the requirement for any stock broker for internet trading?

In order to be able to execute trading through the internet it is mandatory for the stock broker to be registered and have a net worth of atleast an amount of 50 lakh rupees. Other than these eligibility criteria, the broker is also required to have a proper operational system as well as risk management system.

•    What is the requirement for any investor for internet trading?

Online trading makes use of internet for the purpose of trading. Thus you can still execute trading even when you are travelling or are in any part of the country. The only requirement for an investor is an internet connection with any service provider and an access to computer or a PDA or a mobile device which enables you to make use of the internet.

Aug 16

Online Mutual Funds TradingA Mutual fund is a body comprising of group of individuals and analysts who have a better knowledge of the market and therefore these funds are beneficial for small time investors whose budget is very small and also they may not have enough knowledge of where to be investing in. This body of individuals pools in money from short term investors and invests it into stocks, bonds or other securities. The small budget investors generally have small appetite for risk and hence prefer using mutual funds.

Furthermore it is good for the big investors because if these small time investors invest directly in instruments or securities then a time of any disturbances or variations in the market will create panic among these investors and they will draw out their investments from the market. As a result of this, the stock market will effectively go further down where as the people who run mutual funds have better understanding of the market.

Investing In mutual fund is a type of trading because the money which we invest in mutual fund is being used by the lead managers working in this company for investing in various stocks based on their calculations to maximize their profit.

Online Mutual Funds TradingThe Mutual funds can be of two types Stock specific mutual funds: – These mutual funds take money from the investors and invest in particular stocks only or there are also Sector specific mutual funds: – these mutual funds invest only In specific sectors only. People can choose a type of mutual fund which suits there needs or the ones which they feel will give them a better return.

Aug 01

Online Trading AccountIn order to do online trading on one of the established stock exchanges in Indi a like the National Stock exchange or the Bombay stock exchange you need to open a demat account. A demat account is an account that belongs to an individual and is necessary in order to be able to trade shares online. In order to create a demat account you need to meet a DP. You can get in touch with any of the major private sector or the public sector banks in the country. These banks will let you open the demat share trading account.

While opening the demat account you might need your PAN cars. The PAN card or the personal access card is a card that is issued by the government of India and it is a personal card that only u can possess. If you do not yet have a PAN card then it is advisable to get a PAN card in your name because for not just opening the demat account but for several other purposes as well you might need the PAN number. You can visit the following link in order to get a PAN card made in your name. https://tin.tin.nsdl.com/pan/index.html

Online Trading AccountThe demat account can also be opened by the brokerage that you want to register with while wanting to trade shares. You will find the names of several brokerages as well as sub brokerages on this web site and you can contact any of them as they will also help you in trying to get a demat account made under your name in order to do online share trading.

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