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Cyber trading of stocks as the most convenient way of controlling investments

Anyone with enough spare cash can invest in shares via an online broker We take a look at the best ways to invest in shares. The world of stocks and shares investing is notoriously risky ' but also notoriously lucrative. If you get it right, there's potential to bring home the sort of profit that makes returns on savings accounts look like a handful of old coppers.

And although it was once the preserve of the super-rich or professional trader, then those who had their own stock broker, now the stock market is at the finger tips of anyone with enough an internet connection and the spare cash to make investing worthwhile. Why invest in shares? Worthwhile, I hear you say? Take this simple example: Sounds a little better than 2. Although picking such a short-term profit is fiendishly difficult.

For decades, many a wisened investor has sworn by the adage that shares always outperform savings in the long-run.

And the facts speak for themselves: UK shares managed to return an annual average of 7.

The Best Online Stock Trading Sites

But investing in stocks and shares is always a gamble ' as many have found to their peril ' because the markets work in strange and often unpredictable ways.

For example, few would have forecast the FTSE 100 would be at roughly the same level now as it was a decade ago. The key is to approach investing the correct way and with careful, informed judgement. With this foundation, shares have the potential to earn you some of the juiciest returns that money can buy.

But before you can do that you need a share dealing account and choosing the right one can make a big difference to your finances. So, whether you're fed up with puny savings rates and fancy a brave new financial venture, or you're just keen to brush up on your investment plan: It couldn't be easier. Choices here are three-fold: Traditional stockbroker A stockbroker is simply a company authorised to buy and sell shares on behalf of its clients. Usually, any dealings between you and your broker will take place by telephone or post.

Traditional stockbrokers are most useful for the advisory services they provide. This service comes at a cost, though, and is appropriate only if you require a large amount of help with your investment programme.

  • This is the prerequisite stock trading course for all of our education at Cyber Trading University and is a natural progression from our free beginner classes;
  • It is imperative to understand what latency is when putting together a strategy for electronic trading;
  • This is especially true when the strategy is applied to individual stocks — these imperfect substitutes can in fact diverge indefinitely.

As part of an advisory package, a broker will match its stock suggestions to your individual circumstances and portfolio. If you'd rather steer completely clear of all decision-making ' and have significant funding to do so ' brokers also provide a 'discretionary' service. This effectively means you agree an general investment strategy with a broker, then hand over total control over all share dealings to his or her expertise - but it comes at a high price. Try our power portfolio for a money-free taster 2.

Your bank An alternative approach is to explore the stockbroking services operated by your bank. Many banks have a dedicated brokerage arm, which is useful if you value keeping your finances streamlined. Some operate a traditional broker service, others offer a low cost no advice service.

Dealings often take place by telephone, but the internet is fast becoming the prefered choice across the board. This service usually operates in a similar way to that provided by online-only brokers. Online service For most people, online stockbroking is the cheapest and best route into buying and selling shares.

Online brokers operate on an 'execution-only' basis, meaning that the broker simply takes your order and 'executes' it for you. This can make the whole process of stock market investing very simple. You sign up to an online broker's website, deposit some money into your new account, then pick the shares you want to buy.

Algorithmic trading

The rest is taken care of ' money spent will simply be withdrawn from your pot each time. The simplicity means that you can be up, running and buying shares in a few hours. A Russian chimp has shown that anyone can make a mint from the markets Usual procedure with online brokers is for your shares to be held in a nominee account.

  • UK shares managed to return an annual average of 7;
  • Latency refers to the delay between the transmission of information from a source and the reception of the information at a destination.

All this means is that you don't receive share certificates or voting rights, ruling out the need for unnecessary paperwork. Other than that you own the shares, get paid dividends and so on. Like any service, online accounts command fees ' but these are usually much cheaper than the rates charged by traditional brokers.

Best way to buy and sell shares - cheapest stock brokers

And with the rise of the internet, there's a wealth of different options adn a lot of competition. Online brokers cannot legally give customers any advice.

This means that any decision making is entirely your own. However, tools - such as such as share-price graphs and company reports - are usually provided to make things easier.

Some pros and cons of online trading

You can also monitor your portfolio with ease. Beware of rogue traders, falsely advertised as stockbrokers. Read Tony Hetherington's investigation files to find out more.

But charges also vary depending on how active you are, as most brokers offer a discount to their more frequent traders.

  • It is the future;
  • Gradually, old-school, high latency architecture of algorithmic systems is being replaced by newer, state-of-the-art, high infrastructure, low-latency networks;
  • As a result of these events, the Dow Jones Industrial Average suffered its second largest intraday point swing ever to that date, though prices quickly recovered;
  • Jobs once done by human traders are being switched to computers;
  • You can sort stocks by size, performance, and even criteria like sales growth or profit growth.

Many investors will not reach this, so make sure you evaluate your options carefully. Be aware that stamp duty currently 0. Secondly, consider administration charges. Some providers charge a quarterly account management fee while others, such as Selftrade, charge annually. So check what functions the broker's website will provide in this regard.

Does it offer extra charts, graphs, tips, and news - or must you go elsewhere? One option is to use our free, comprehensive and up-to-date market data, news and share tips more on this in 'How to make money out of shares ' below. If this is important to you, it's worth checking the details. Reinvesting does usually incur an additional cost, though, but can work out cheaper in the long-run.