| Beginners Guide To Trading Online | | | | intervention in the most part ). Once you place an |
| So You Want To Buy Or Trade Shares? | | | | order to buy or sell, you normally have a limited |
| The first thing you need to do if you are online, is | | | | amount of time to accept or turn down the price |
| check out online brokers such as TD Waterhouse or | | | | offered. |
| E-Trade. Opening an account is normally free, and | | | | How Are Prices Made Up? |
| once it is opened you can deposit money into your | | | | Prices consist of a bid and offer, with the Mid price |
| account so that you can trade. | | | | being the actual price of the share. Most stocks have |
| What Type Of Broker? | | | | one or more marketmakers that set the price for |
| The cheapest is an execution only broker. What this | | | | the stock so they can make money on the spread in |
| basically means is that you aren't given any advice on | | | | return for making a market in that stock. For |
| when to buy or sell the shares/trade. Their job is to | | | | instance, you may have a stock priced at 136p with |
| provide a quote and fill the order. | | | | a 134p bid and 138p offer. This means the |
| What Is An Order? | | | | marketmaker will buy the stock off you for 134p and |
| All participants in the market want to do one of | | | | sell it to you for 138p. |
| three things. They either want to buy, sell or hold. | | | | Okay I Want To Place The Trade. |
| You only need a broker when you want to buy or | | | | So in the example above you agree to buy at 138p |
| sell. Holding the shares takes care of itself ( and is | | | | and the deal goes through. Congratulations you now |
| the least expensive while your stocks are going up in | | | | own shares in Company 'X'. If you pay the full offer |
| price ). | | | | price, it is also known as the 'touch' price. One thing |
| Online Trading Platforms | | | | to check is the normal market size for the shares |
| By having an account online, it allows you to buy or | | | | you wish to buy. |
| sell shares automatically ( i.e. without human | | | | |