Online trading using laptop and smartphone

What exactly is online trading?

on April 12 | in All, Investing | by | with No Comments

Over the last few decades, the internet has changed some industries completely. One industry that has seen a significant change is financial trading. Before the internet revolution, most people traded the financial markets via a stockbroker. Or, they were traders for large trading houses. They were usually based in one of the financial capitals of the world. Wall Street in New York and the Square Mile in  London were both popular.

With the advance of online trading, anyone can now trade from the comfort of their own home. Online trading platforms like CMC Markets are widespread. And unlike the pre-internet days, one can get live, up-to-date information on the markets. This is a far-cry from the old days. Most retail traders – those who trade from home using their own money – relied on TV news broadcasts or the newspapers. They would use Bloomberg TV or the Financial Times to get indicators on how the markets were faring.

Using a smartphone for online trading

Using a smartphone for online trading

Another advantage of online trading is that you can make money on thousands of instruments. Many of these prove far more profitable than the actual buying of a share/commodity. The standard trading process once involved holding something in your name. You would sell it later for a bit more profit. Now, methods like spread betting allow you to speculate on market movements using points. You make a profit depending on the number of points a particular asset goes up or down in price. Using this mode, you can trade on everything from currency pairs to oil.

To illustrate further, let’s suppose you were going to trade the share price of Shell Oil. If you thought the price was going to rise you would go long (buy) units representing the value of the shares. If you predicted falling prices the opposite would apply. With modes like spread betting, you can speculate on both upward and downward trends. Contracts for difference is another mode that uses the same mechanism. Most brokers also allow trading on margin, meaning you don’t have to have the full value of a position to open it. You would borrow the rest from the broker. It’s easy to accomplish these modes with online platforms.

As an online trader, you can make profits far quicker than you ever could before the internet existed. Of course, losses are possible too, so it’s best to research and practice before you start.

News broadcast feeds, accessible at any time, are another benefit of online platforms. By connecting to this information, you’re able to assess any changes to the marketplace. Anything that can affect your trades as they happen can be monitored. Not only that, but many of the platforms use expert traders and financial forecasters. They state how they believe the market you are trading is going to behave.

So, with the rise of online platforms, it isn’t surprising that more people are getting into trading.

Sources: ft.com

A financial analysis made online

A financial analysis made online

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