Tuesday, 29 January 2013

What is Online Stock / Share Trading?

What is Online Stock / Share Trading?

In this article on online stock or share trading, we will discuss very basic things about online stock or share trading like:

1. What is Online Stock / Share Trading?
2. Who is Stock/Share Broker? What are various responsibilities of a good share broker?
3. What is Demat Account. What is the requirement of Demat Account for Online Share Trading?
4. What are the various benefits of Online Share Trading?
5. How to buy and sell shares online?
6. What are the various precautions to take while Online Share Trading?
7. What are the various sources from where you can collect information about Online Share Trading?

1. What is Online Stock / Share Trading?

Online Share Trading is buying and selling shares via Internet. With online share trading, in most cases customers access a brokerage firm's website through their regular Internet Service Provider. Once there, customers may consult information provided on the website and log into their accounts to place orders and monitor account activity.

2. Who is a Stock/Share Broker? What are various responsibilities of a good share broker?

A stock broker or a share broker is a person who is an expert in share markets. He keeps himself updated with the latest fluctuations of the market. He takes a certain amount of fee from a person who is interested to invest in the share market. He has a very big responsibility as he is the one guiding the client to invest his / her money. The stock broker or a share broker would be responsible for the following

A) Guide the person accordingly.
B) Keep himself updated with the market
C) Guide his clients as to where they can invest their money and get good returns.
D) He should also guide when the client should withdraw his money and how to reinvest the same money.
E) He needs to be honest, trustworthy and also be understanding towards the client.
F) He also needs to help his client to open the necessary accounts needed for stock and share trading.
G) A broker should also be in a position to get new clients  and build a good relationship with them.
H) He is also responsible to execute the orders given to him by the client in regards to the investment.
I) A stock broker is a person who is highly trained and knows the tricks of the trade in stocks. He is like a bridge between the client and the stock market. In a way you can say he is like an employee for his clients and he needs to execute the orders given by the customer.

3. What is Demat Account. What is the requirement of Demat Account for Online Share Trading?

It is necessary to have a demat account for trading in share market. We provide you complete process and guidance for share market. You can trade online following a simple procedure. It is must to have a trading account or demat account with authorized stock broking firm or with a bank. You will get a unique username and password for your trading account. Shares bought by you online will be kept in your demat account. You can operate this demat account online from anywhere in the world.  Just like other trading terminologies, it is important to choose the best broker. You could see a numbers of brokers in the market. Choose wisely and make sure that they have reliable trading history.

4. What are the various benefits of Online Share Trading?

Online share trading is taking place in the changing business world rapidly. Today online share trading has become very easy for investors. You can trade share online on just one click. You can buy or sell the shares online comfortably sitting at your homes, offices or else anywhere in the world. It saves your time from visiting stock exchange or brokers to trade or for the technical analysis. In short online share trading has following advantages:

A) Buying shares online is safe and convenient.
B) Reduces paper work
C) Easy and comfortable to access from anywhere in the world
D) Trade with live price in stock market

5. How to buy and sell shares online?

Online buying of shares is very easy. There are some simple steps to follow for people who want to buy shares first time.

A) Choose best stock broker: A stock broker is like a consultant who is expert into stock market and is authorized. Stock brokers have deep knowledge of the market as they keep on doing the research work and can guide to buy shares for the best benefits.

B) Open demat and trading account: To buy shares you need to have your own demat and trading account. Demat account hold securities which you buy. It can be open through financial brokers. Trading account is required to buy or sell shares. A bank account is also required to carry out financial transactions with the trading account in which the money is credited and debited on purchase and sell of shares.

C) Buying and selling shares: When an investor wants to buy or sell a share, he has to login the trading account software with account details and password and selects which share is to buy or sell, define the no. of shares, company name and the price at which he wants to buy or sell. At the desired price is reached, this trade gets executed. The amount will be debited or credited from the Bank account and the shares are debited or credited into the demat account.

6. What are the various precautions to take while Online Share Trading?

Online share trading tips are useful for one and all, starting from an online stock trading beginner to an active online stock trader. All the good brokerage firms give out intraday calls, long term calls, short term calls, derivative trading strategies as well as other online stock trading tips free to their clients as part of their quality advisory services.

A) Use the right stock broker - To get the right broker, compare various stock brokers in terms of online stock trading fees because high brokerage can eat into your valuable profits.

B) Learn from stock market history - Not knowing stock market history is a major handicap. Remember to look at historical data in line with stock market advice provided by your service provider.

C) Do not panic when the stock market is down - Going against the herd takes courage, but that courage pays off. Stocks are generally more attractive when no one else wants to buy them. You will do better as a stock market investor if you seek out bargains in parts of the stock market that everyone else has forsaken.

D) Rely on company valuations - The only reason you should ever buy a stock is that you think the business is worth more than it's selling for - not because you think a greater fool will pay more for the stocks a few months later.

7. What are the various sources from where you can collect information about Online Share Trading?

Online stock trading is now a popular way of creating wealth. But one needs to possess great deal of online stock trading information in order to become a successful online stock trader. With the emergence of internet in a big way, there are many online sources of getting quality information on online stock trading. Few of them are:

A) E-books on online stock trading- You can download the e-books and learn about stock market basics, which can prove very useful for online stock trading for beginners.

B) Free newsletters - You can register on online stock trading sites and subscribe to newsletters for regular updates on stock markets. Newsletters come generally on daily, weekly or monthly basis.

C) Various financial websites - Many financial websites provide knowledge on stock markets and online stock trading information.

D) Various stock trading forums- You tend to learn a lot from trading forums as the online stock traders share their first hand experiences. You should also participate in the discussions in order to build up on your confidence.

E) Online stock trading tutorials - Many broker sites provide online tutorials to help you understand stock markets and online share trading.

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