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The Internet is the
easiest, cheapest, and most efficient way to deal shares. Many
brokerage firms offer online sharedealing through execution-only
accounts. They often include charts and educational tools to help
investors learn on their own.
account is one in which no advice is given; the broker merely
executes the investor's decisions. The vast majority of online
accounts are execution-only as it's the cheapest and the most common
Setting up an Account
To begin, an investor
must register and transfer money into their account. Various brokers
have different processes for this. Some allow investors to fund an
account with a debit card while others require a cheque to be mailed
in. The more the process is based in paper, the longer the wait
times. Some take as long as two weeks to set up, whereas others can
take ten minutes.
As a means of
enticing new customers, many online brokerages offer a lot of free
delayed financial information so that investors can model their
ideal portfolios before committing actual money. Once they have
committed money, investors can access real-time financial
information like analysts' earnings forecasts, company news, and so
Share prices and market indices may be delayed by 15 minutes in
order to avoid paying for 'live' prices. But if investors want to
pay an extra monthly charge, they can get real-time share prices and
business news. Frequent traders are also offered this service.
How to Trade
When an investor has
settled on a share they want to buy, they type in the share code.
The system will display the current best price and the investor has
a certain time limit to decide to buy at that price. If they accept
the deal, the share is traded instantaneously. Not all online
brokerages offer instantaneous trading, though the trend is in that
is cheaper than other dealing because it cuts out the middleman.
Deal charges can be £10 or below, but investors can expect to pay
£15 to £20 for a £1,500 deal. Online brokerages are trending toward
flat fees rather than percentages. On top of these charges, many
will charge a yearly or quarterly administration fee to cover the
costs of paperwork.
These days, an investor doesn't even need to be at a computer for
their online sharedealing; they can use Internet-enabled mobiles or
personal organisers that use Wireless Application Protocol
technology. Online sharedealing has given investors more access and
control than ever before, yet another trend that is expected to