How to Begin Online Stock Trading

The number of investors that have been drawn to trading stocks online in recent years has risen significantly, and investors that rely on full service brokers have been on the decline. Online stock trading provides self-directed investors the ability to trade stocks for just a fraction of the cost of a traditional full-service broker and most platforms are easy enough to use. The combination has made online trading very popular among investors.

Setting Up Online Trading Accounts
In order to trade stocks online, investors need to open up an account with one of the many online discount brokers. There are a number of good ones to choose from and most firms charge somewhere in the range of $4 to $20 in commissions to execute a trade. To open an account, some basic information must be provided and the account holder must sign several documents accepting responsibility for the activities conducted in the account. To open an account, the holder must be at least 18 years of age and have the legal capacity to enter into a contract.

Funding Online Trading Accounts
Before trading can begin, the account must be funded. There are several ways to fund an account. Traders can simply write a check from another financial institution or one can transfer securities that were being held with another online brokerage into the new trading account. Obviously, the account must have a cash balance of sufficient size to cover any trades.

Online Trading Stock Orders
When buying or selling a security, investors can either place a market order or a limit order. A market order is the current price of the stock while a limit order is a specific price at which the investor is willing to buy or sell the stock. Market orders are almost always executed more quickly than limit orders. Depending on the volatility of a stock’s price and the limit set on the purchase or sale price of that stock, the order can be executed quickly or not at all. Orders that do not get executed expire at the end of the trading day.

Bid and Ask Price
The bid is the price at which someone is willing to pay for a security while the ask is the price someone is willing to pay for the security. In a stock with high volume, the spread between the bid and ask price is usually quite small. If a stock is very lightly traded, the bid and ask spread can be much larger.

Fundamentals of Equity Trading

Equity trading market is a lucrative field for investors. It generally refers to the universe of stock and option in public market, which empowers the traders’ investments, needs and can be gainful, expensive and enjoyable. The key to enjoy this business is doing proper homework and know what sources to believe. If you are looking forward getting into the equity trading field, then you need to have a good knowledge of the basics of equity trading.

Equity generally means an ownership value in a property which eliminates the debt trading. This type of trading usually takes place in the public markets, primarily involve many different securities, and require diverse strategies and trading skills. The most interesting aspect of equity trading is that it can take place at nearly any time of the day or night. It is not only profitable for big investors but also for traders who desire to have short term benefits. It can be easily performed by the owner of the shares, or by an agent authorized to buy and sell on behalf of the share’s owner.

Equity trade market offers bid and ask price for all trade. A bid price means the price at which a broker purchase stock position and asks price generally refers to the price at which broker sells a stock position. However, it is also important to realize that the bid price and ask price can’t be equal. Ask price will be always higher than the bid price. It means that if an individual buys the stock, he or she pays the higher price and if sells the stock, the individual receives the lower price.

Equities trading also offers numerous benefits that can be explained as follows:

• Equities Trading exist in both domestic as well as international public market and traders can trade equity through futures markets.
• Equity trading market is open 24 hours a day and so traders don’t need to wait the market to open.
• There are many forms of Equity which usually refers to options, warrants and convertible preferred stock.
• By utilizing certain equity trading techniques, equity trader can decrease the losses. In addition to this, with the help of technical analysis tools a trader can involve in equity trading market and may even avoid extreme losses.

Nowadays, many brokers from all across the world and in countries like UK, Ireland, US, Canada is offering online equity trading on a wide range of equity and options markets. In recent times, many people aim to trade equities and put everything on the shoulders of fundamentals. Though this is not a terrible approach, but it is better for investing rather than trading. Although every investment can’t be always profitable, but on the basis of trading skills and experience, there are always good chance and scope for you as an investor to earn the huge amount of profits from the equity trading market.