The Trading market has grown rapidly as more and more people become interested and enter the field. With the advanced technologies, we were able to witness the invention of Automated Trading systems and Online Trading Platforms in South Africa.
What is Online Trading?
Online Trading is the act of making transactions (either purchasing or selling financial products) on the internet using Online Trading Platforms. It includes trading in stocks, bonds, future international currencies, and other financial tools. It’s a part of E-commerce.
People can trade online through Online Brokers. An Online Broker is a brokerage firm that offers its services on the internet. Unlike the traditional brokers, the investor does not need to meet the broker face to face or call on the telephone. Everything occurs on the web. Brokerage firms make Online Trading in South Africa available to anyone who anyone who wishes to join the world of financial markets.
What is the difference between Traditional and Online Trading?
Online Trading South Africa made a lot of things easier. In the past, investors had to call or meet their brokers in order to make a trade for them. There was no other choice. In general, the whole procedure took too much time. The broker confirmed how long the order open and which account to deposit and withdraw money from.
With Online Trading, it’s a “do it yourself” world. In other words, Online Traders can buy and sell financial securities on their own. In fact, they can even carry out multiple trades without needing anyone’s help. Most importantly, Trading Online is a fast, almost immediate process, unlike the Traditional Trading.
Also, the Online Trader has much greater control over the trades than the Traditional Trader. Online Traders can execute trades considerably faster.
Apart from being able to manage multiple tasks simultaneously, the Online Trader has access to extensive data. Online brokers and other websites provide comprehensive information on companies, currency exchanges and markets.
The internet has opened the door to the investment and trading world for a wide range of people. Unlike the old times when only wealthy people could perform and access Trades and investments, now anyone down the socioeconomic ladder can do it. Online Trading has given any individual who owns a personal computer and some spare cash the opportunity to explore and join the market.
Benefits and misfortunes of Online Trading South Africa
The market has become more accessible, but that doesn’t mean that you should take Online Trading lightly. Online Trading in South Africa can be a blessing but also can be the devil in disguise.
First and foremost, anything that can be done online will make your life convenient. When it comes to online trading, you will only have to open a trading account using the Internet and you can then start trading.
There is no need to visit the bank or call an agent for the same. As long as you have an internet connection and an online account, you are good to go. Trading Online is super convenient and there is no hassle, as it saves your time and efforts.
Another top benefit of Online Trading in SA is the low cost. When you work through a stockbroker, you pay a fee or a commission, which is charged as per the traditional method. However, in the case of Online Trading, you pay a fee, which is much lower than the one charged by the brokers. If you trade in large volume, you can negotiate the fees of the broker and bring down the cost.
One of the biggest Online Trading benefits is the speed and efficiency. It is possible to transfer funds between two accounts and ensure that there is no delay in the same. You can make a transaction through a single click and buy or sell the stocks or bonds. You can make a quick transaction and generate faster earnings.
As an investor, you seek higher control over the portfolio, and you achieve the same through Online Trading. You can trade anytime you wish to and will not have to contact a broker to process a transaction. Trading Online will help you make instant transactions and you will be able to review the same at your comfort. You will not have to speak to a broker in an attempt to get the best bet on your money. You will have complete control over the investment and you will be able to make decisions with regard to buying and selling the stock with minimal interference.
However, Online Trading Platforms are only as good as the underlying servers and software. High volumes on volatile trading days can slow processing speeds and information flow. You could incur substantial losses if you couldn’t place the required buy and sell orders, especially in fast-moving markets.
Software bugs can lead to delays in getting price quotes and information on order status. This also could result in trading losses, because you might enter orders based on incorrect price quotes or delayed order-execution reports. Investors depend on Internet and cellular service providers for researching information and placing trades. If these Internet access points malfunctioned, you would not be able to receive timely information or place critical trades.