Buying Shares Online
If you’re want to be buying shares online, then there are a few things you need to consider.
What are they?
How do they affect your share or stock trading?
They are:
1. Are you buying shares for a long term investment?
If so, then consider the commission costs. If you are planning to buy low and sell much later then of course the price of entry is important, but the longer you hold it for, it may be less crucial in terms of precise timing of the buying than day trading for example where you are trading on chart patterns to determine your point of entry.
2. Are you share trading over the short term?
If so, do you want a full service broker who does everything for you, with your permission or do you want more control and see the prices on the screen and place limit entry orders? Full service brokers charge more in general, though the charges are getting more competitive and offer other services that for example are only available to sophisticated investors.
3. Are you trading shares or CFDs?
CFDs or contracts for difference, are based on underlying share prices with or without a spread imposed by the market maker and can be used with leverage if you wish. Usually more stocks can be shorted. CFDs can be traded with leverage and the commissions are often lower also, depending on the broker or CFD provider.
So when buying or selling shares online consider what you need:
1. Full service of online only
2. Commissions
3. Which shares in which countries do you want to trade and are these available through the stockbroker
4. Do you need special services such as special offers to get into company shares at special prices for sophisticated investors.
5. Do you want to buy shares or CFDs (assuming they are permitted in your country)
So keep these points in mind when placing any orders for shares online.
. 25 Feb 10 | stock trading