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