The Advantages and Disadvantages of Online TradingOnline trading is almost commonplace these days. Everyone from investment clubs in senior citizen centers, to financially savvy college whiz kids, to the average Jane or John living in middle America can easily become their own online money manager. All it takes to partake in online trading is some spare cash, the desire to invest, and creating an online brokerage trading account. Although the process of online trading is simple and just about anyone can do it, there are both advantages and disadvantages you have to consider if you are deciding on signing up. Lets find out what the advantages and disadvantages are for online trading

The advantages of online trading: You have the ability to manage your own stock portfolios You will have more control and flexibility over the types of transaction you choose to conduct The commission costs for trading are significantly less money than using the services of a professional broker You can get access to lower fee mutual fund investments Online brokerage firms tend to offer their clients a slew of tools included real-time Level 2 stock quotes, news, financial tools and graphs to help you do research Someonline brokerages will provide their clients to free access to high quality research reports created by Standard and Poor and other predominate financial players Online account investors have access to their accounts 24/7 although market hours (trading hours) are from 9:30am to 4pm As long as you have access to a computer and the internet, you can take steps to manage your finances wherever you may beThe disadvantages of online trading: First time investors may get sucked into all the technology and may temporarily forget that they are actually using real money There is no mentoring relationship between a professional broker and an online trading account holder, leaving the investor out on his/her own to make choices Novices not familiar with the ins and outs of the brokerage software can make costly mistakesLike any financial strategy, committing yourself to online trading takes research and dedication to make sure everything is up to par. By taking the time to do your research you will be able to overcome a great learning curve and even possibly make some money from online trading.

Read more: Investing: Online Trading Follow us: @GoBankingRates on Twitter | GoBankingRates on FacebookAdvantages of online trading: - Lower brokerage and fees (in almost all cases). Fees can be even lower if you're a frequent trader. - More control on your transactions. You can decide exactly what price and time you wish to buy, down to the fraction of a second, as well as change your order whenever you feel like. No waiting on the phone or having to go in person to a branch. - More flexibility in terms of being able to see what options are available to you and scan the market. - With online trading, you often have access to lower-fee mutual fund products since you are your own advisor and nobody gets a cut along the way. - Handy tools to model interest earned, yield, returns etc., as well as financial screeners to research stocks and bonds. - Good research tools and newsfeeds on each stock, which you can delve deeper into in your own time. A conventional offline broker may not always be able or willing to offer you all of these. You can also get many of these for free from sites like Marketwatch, Fool.com etc. - Real-time values of your portfolio. - If your online broker offers Level 2 quotes in real time, you can actually see what the bid and ask prices and volumes are and get a sense of where and how your order will fit in. (Mine lets me have access for no extra charge). - Some online brokerages have access to research reports prepared by Standard and Poors and such, and these can give you some really good insight.

Disadvantages of online trading: - Youre on your own; you have to decide if it's a good or bad buy/sell. You have no advisor to help you. If you're not a pro, your risks may be higher. - If you're not careful, you could end up trading too much just because it's so easy too (I've made that mistake ;-) but it's in your hands to control.

The advantages and independence of online trading far outweigh the disadvantages, but start slow, find a good brokerage with a good reputation and take it a step at a time till you feel confident enough and know the risks and rewards well. There's no reason why you shouldn't have a mix of online and offline holdings in the transition periodDisadvantage of Online Trading Online Trading is very expedient and advantageous because most online stock trading platforms offers informative tools and coaches you with smart investing. When it comes to online trading, it has both advantages as well as disadvantages. As we all know, internet is an open medium which still entails risk to online cash dealings. Some online trades have fear of leaking the confidential matter during the internet trade, and are also unenthusiastic to assist heavy cash transaction on the internet. The confidentiality matter and leak of secret information also greatly worry the business originators. Online trading has been a big enhance for the stock market. Online traders fall sort of constant support and submission. In spite of the fact that there are certain disadvantages associated with online trading, yet if one precedes with necessary safety measures, it is a useful tool in operating your business. Here are the main disadvantages of online trading, one should think about when trading online: The first foremost disadvantage of online trading is the chances of losing the trade. If the mechanism or system fails due to the less speed of internet connection, the investor can suffer a big failure. The other disadvantage is regarding the fees of the online brokers. As some online brokers charge apathy fees from traders. If you trust them without enquiring about them, it will prove to be a big loss for you. There is a greater risk if trades are done extensively on margin, monthly software usage fees. The time sensitivity in nature leads to the result that most option expires worthless. This implies on every trader of online trading. An investor can suffer from a big loss, if they dont have the appropriate knowledge of how to buy and sell the shares. The disadvantage side of online stock trading is financial risk. Though there have been other negative elements noted in trading forums, the one thing that one should be aware of is the risk part that online stock trading provides. It may face other problems such as electricity cut-off, PC problem etc during online trading then immediately you have to contact your trading system executive and place orders or do trading.The key to be successful in online stock trading is steady learning. Stay updated with the developments to be able to make wise decisions and mitigate their risks

What are the advantages and disadvantages of Online Trading?

Due to the problems that arose during paper shares, there was a need of a system that would make share transfer, buying/selling of shares, etc. an easier affair.Therefore in 1996, the Indian parliament passed the Derivatives act, which allowed online transaction of shares, thus making it much easier for the broker and investor.In the new online Trading system, an investor must open a demat account with one of the Stock Brokers to start trading online.A demat account is a must for an investor to trade online.Mentioned below are some of the advantages of trading online:1) Easier and convenient way to own shares2) Immediate transfer3) Zero stamp duty on transfer of shares4) Safer than paper shares, e.g., fake signatures, delay, thefts, etc. 5) Lesser paperwork for transfer of securities6) Less transaction cost7) No odd problems. Even a single share can be sold.8) DP registers a change in address with all companies. No need for the investor to contact the companies immediately. 9) DP transmission of securities, thus eliminating the need of notifying the companies.10) Automatic credit in demat accounts11) Both equity and debt instruments can be held by a demat account

The depository system aids in reducing the expenditure of new issues due to lesser printing and distribution costs. It increases the efficiency of the registrars and transfer agents and the secretarial department of a company. It provides better facilities for communication and timely service to shareholders and investors.

The disadvantages of online trading are mentioned below:1) Investors, who are trading for the first time, go with the flow and get immersed in technology and actually temporarily forget that they are actually using their real money. 2) There is no relationship that of a mentor between a professional broker and an online trading account holder, thus leaving the investor on his own to make choices of the right shares.3) Users who are not familiar with the ins and outs of the basics of brokerage software can make mistakes which can prove to be a costly affair.4) This is like any other financial strategy, where your commitment to online trading takes research and dedication to make sure by yourself that everything is up to par. You have to take time out to do your own research where you will have to overcome a great learning curve to make some money from online trading a possibility.

Meaning:Equity shares are those shares which are ordinary in the course of company's business. They are also called as ordinary shares. These share holders do not enjoy preference regarding payment of dividend and repayment of capital.Equity shareholders are paid dividend out of the profits made by a company. Higher the profits, higher will be the dividend and lower the profits, lower will be the dividend.

The increasingly popularactivityofbuyingandsellingsecuritiesover the internet, or to a lesser extent, through abroker'sproprietary software

DefinitionOnlineTradingmeans buying and sellingsecuritiesor currencies over the internet, or through a broker's proprietary software that works through the Internet

. Underwritingrefers to the process that a large financial service provider (bank, insurer, investment house) uses to assess the eligibility of a customer to receive their products (equity capital, insurance,mortgage, or credit)Securitiesunderwritingrefers to the process by whichinvestment banksraise investment capital from investors on behalf of corporations and governments that are issuing securities (bothequityanddebt capital). The services of an underwriter are typically used during apublic offering