Author: Eduardo Montero
Last Updated on March 30, 2022
Internet had brought revolution in all the fields and stock market is not an exception. Once stock market was only for the rich people as it involved lots of formalities and investment, but with the advent of the internet, the stock market has become a boon to people who have lower income. Once the stock market was all about spending lots of time with analysis as all the details were available only in paper and transaction done in person. But after the arrival of the internet, all the activities (Buying and selling shares, analysis) are done with the mouse clicks.
Internet has brought lots of changes within the stock market. Let us see some of the changes and advantages brought by the online stock trading.
1. Brokers: Initially the brokers were one of the most expensive aspect of stock trading. As the stock brokers were completely involved in trading, investors actually had less idea about the stocks and they simply followed what the stock brokers advised. Stock brokers also charged high brokerage due to their command in the stock market. But the scenario has changed with the internet. With more access to the stock market, investors are more involved in the stock market ever before. Even though stock brokers are still an essential part of the market. Stock broking also got expanded with different kinds of brokers as explained in previous article.
2. Electronic stock data: Before the arrival of the internet, all the stock prices were published in the newspaper next day. which means you have to wait almost a day to know the latest share prices. Or you were supposed to call the stock broker to know the latest. But now almost all the investors have access to streaming share price datas and with mobile phone it has got even more easier.
3. share Analysis tools: As i previously said, investors were totally relying on stock brokers for recent developments on share prices. But now with advanced tools like charts, electronic RNS, trading software etc. things have just become easy. Investors can now make their own decision in buying and selling shares. With the advanced charts, you can analyze the past movements of the stocks and with advanced trading softwares, you dont have to be sitting before the computer as the computer would do the job for you.
But with the developments always comes the risk. Here are some of the risks in online stock trading.
1. Data theft: With all the transaction done online, the chances of your money getting to someone’s hand is more likely. As the online transactions are controlled by passwords, its easy for the people who have good knowledge about the systems to take it away without your concern. You might even come across some strange brokerage fee (ie) phone brokerage is more expensive compared to online brokerage. Data theft is one of the reason behind this expensive brokerage.
2. Loosing track: With online softwares, maintaining stock portfolios is easier. So people tend to track lots of stock at the same time instead of tracking one or two. so investors normally loose track of the share prices or recent developments which might be crucial to make profit or prevent loss. So investors should learn to the keep the balance.
3. Stock trading softwares: As the usage of the software is getting more and more everyday, investors might get too dependent on the softwares as the softwares always has the tendencies to commit mistakes which might end up crucial for your investment. So investors must keep in touch with datas from all the corners instead of just one.
Author: Eduardo Montero
I'm Eduardo Montero. Computer scientist by profession and passionate about online trading with more than 10 years of experience in the financial markets. I'm the author of hundreds of articles published in other websites about the online trading industry. Learn more about me here: About the author.