Buying and selling shares online
Using stock market shares, either to obtain dividends or speculate on their price, is an increasingly popular practise as it enables making money through the growth of your savings.
Of course, there is also a risk of loss present but, depending on how you buy and sell your shares, this risk can be lessened.
If you would like to know how to buy and sell the shares of large companies that are quoted directly online then here are some explanations that will interest you.
Buying shares to become a shareholder:
Many individuals and entities that buy stock market assets do so in order to become shareholders. This is the simplest use of shares and their main objective. In fact, when a company issues shares it is possible to acquire them directly online.
In all cases, for shares that are already quoted, it is necessary to buy them by passing through an intermediary that can be an online broker or an online bank.
Of course, it is equally possible to buy shares directly from sellers that have themselves previously bought shares in the same manner that you can resell your shares.
Buying and selling shares with banks online:
The simplest system for buying and selling shares is by passing through one of the placement products available through the banks, particularly the online banks. With the 100% online bank operations you can very simply pass your buy and sell orders directly via the internet without having to visit your bank branch.
The advantages of this system are numerous as it is your bank that is responsible for the execution of your orders including the buying and selling of your shares.
The only real disadvantage of this method concerns the fees that can be higher than those you would pay if you bought and sold shares yourself. However, these bank fees generally do not exceed 4%.
One of the major advantages of bank placement products is that your purchases and sales of shares are supervised by one of the specialist intermediaries of the share markets and therefore you can benefit from their advice.
Buying and selling shares with online brokers:
Another method is to call on the services of an online broker. Their function is similar to that of online banks with the difference that you do not generally benefit from individual accompaniment or advice, but the fees are less and it is you alone who decides which shares you wish to buy and sell.
These online brokers also enable you to make profits through stock market shares, without actually having to own them outright. To do so you simply speculate on the movement in their price. The tools that enable you to do this are called CFDs.
To summarise, there are several methods for buying and selling shares on the internet. Before deciding which solution is right for you check carefully the fees charged, you should also ensure you have sufficient knowledge and understanding of the stock markets. According to these criteria, each of these two methods offers different advantages. It is also important to understand the quotation system for shares to be able to speculate profitably on this type of asset.
Share trading using CFDs
When trading shares through CFDs, you don’t really own the shares concerned.
Indeed, during the trading of the CFD, the investor only has to sign a contract with an intermediary with the aim of exchanging the difference between the starting value of the share and its value at the contract closure. This is why these contracts are called CFD, for ‘Contract For Difference’.
In addition to that, the CFDs generally offer a leverage effect so making it possible to increase the trading profitability of the shares on a short term basis. This leverage effect ranges between 5% and 10% of the share price.
CFD contracts are therefore trading tools offering the possibility to trade the shares without the need to actually possess them or buy them outright. However, the traders that invest in CFDs also receive dividends and fractions of shares in the same way as a traditional shareholder with the difference that he does not actually own a share of the emitting company.
The advantages of share trading with CFDs
As you have certainly understood, share trading online with CFDs offers many advantages. The investment is much less expensive for the trader who only pays an average of 10% of the traditional share price.
In addition, thanks to the leverage effect, he can expect a reasonably substantial profit in less time than one normally would within the framework of traditional trading.
But the CFDs can also be used with the aim of covering open positions on other markets.
Trading in shares online:
Without needing to really physically buy or sell shares online you can make profits rapidly using CFDs with the Forex brokers that enable you to take position on the rise or the fall of these assets.