Online share trading

Online share trading

With the advent of stock market, floor trading has been the norm all around the world. But with growth of modern technology online share trading has replaced floor trading almost all around the world. Earlier trading used to take place through a process known as open outcry. Open outcry is a form of communication between sellers and buyers on a stock exchange through various hand signals which transfers information about the sale of shares.

New York Mercantile Exchange, the Chicago Board of Trade, the Chicago Mercantile Exchange in the United States are some of the examples where buying and selling of shares takes through open outcry method. London Metal Exchange in the United Kingdom also uses this method.

Times have changed, so has the available technology. In this fast paced life, the need of the hour is for cheaper, simpler and a quicker way of trading shares in the stock market.
This brings us to the concept of "Online Share Trading"

The basic difference between online sahre trading and floor trading is that you don't have to be physically present or make endless calls to your brokers enquiring about the current prices and gathering vital information about the company and the industry concerned. We have now come to an age of online share trading. You just need a computer and internet connection.

Advantages of Online Share Trading

* All the hassles involved in investing via brokers is eliminated and you can invest yourself.
* Internet provides an abundance of information about each and every industry and market all around the world qwhich helps you in making informed decisions.
* Earlier huge amount of paperwork was involved in share trading but now literally all the paperwork has been reduced.All the recoirds remain online.

How to get started with Online trading?

There are various online brokerage house that helps you in this trading process. You have to first register with one of these online brokerage firms. They would charge you brokerage on shares that you trade.

When you register with any of these online trading brokerage providers you would be provided with 3 accounts

* A trading account, which helps you in trading online
* A demat account, this is the account through which you will manage your trading process.
* An online bank account which facilitates in easy transfer of money via internet.


We have seen that online share trading reduces a lot of hassles that was primarily involved with floor trading, but is it cost effective?

An informed investor must check various sites which provide this service for brokerage they charge and all other costs.

An investor must not only check for the brokerage rates, he must objectively weigh the cost of all other attached services that these online share trading companies provide and then make an intelligent decision.

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