Online trading is big business. If you want to make a killing on the market, all you need nowadays is a computer and a dream. Equities trading – i.e. the buying and selling of stock shares – is a great way to make money, and as I say, anyone can do it. Just open an account online, research the market, and get buying.
Share trading for beginners
Before you can get started share trading online, you’ll need to know a few things. First off, you’ll need to know what a share is. Basically a share is a unit of possession. To buy a share of a company means to have partial ownership of that company. In order to buy shares, you’ll need what’s called a broker, someone licensed to buy and sell shares on the various global stock exchanges.
Online brokerages differ in cost and the services they offer. Some of the more expensive ones will give you guidance (i.e. market analysis), but most of the cheaper ones won’t, so it’s important to find the right one for you.
Different brokers will charge you different amounts per trade. If you’re spending peanuts, you might want to go with one of the brokers charging one per cent per trade (though there’s usually a minimum charge). If you’re buying lots of expensive shares, however, you should go for a set charge, like the ones offered by HSBC and Halifax.
When you open an online account, you’ll be able to purchase shares with both a cash account and a margin account. A cash account is an account containing your actual money, while a margin account is a loan account that bases line of credit on the value of your stocks. Most firms won’t loan you more than fifty percent of what you have in your cash account.
CFD stands for Contract for Difference. It’s basically a contract between client and seller, whereby the seller gives the client the difference between the value of an asset when the CFD is started and the value when it’s closed. CFDs can be traded on high leverage and bought in large amounts, which is why they are such a popular trading instrument. You might want to trade CFDs.
Day trading stock is the practice of buying and selling stocks in a single trading day. If done right, it can make you a fortune in the matter of a day. However, four out of five day traders are said to lose money when day trading, so be careful.