Online Share Dealing: Back to Basics

Online share dealing accounts can offer a quick and easy way of starting out in stock market investment if you’re looking for a more hands on approach investing and are prepared to put up with a degree of risk.

How do I trade online?

Online share dealing for the individual involves setting up an account and buying and selling shares through it. When you set up an online share dealing account you will usually be required to pay a flat rate of between £6.00 and £20.00 per trade. Some accounts will also charge a quarterly membership fee too. You should make sure that you are aware of all the costs involved before committing to one particular account.

There are many online share dealing accounts available from a range of providers and you can often open an account simply by registering a debit card and providing a few personal banking details.

What do I do next?

1) Decide your limits. Before you begin you should decide on a maximum amount you would like to invest with. Trading can be exciting and fast paced, but you should be completely clear about your limits and the risk involved to your capital before you begin.

2) Do your research. It’s always best to invest in a company you already know something about, and research can help you to gauge risk involved in a particular company. Many share dealing account providers will offer a short trading history on individual companies, use this to your advantage

3) Diversify. Rather than buying many shares in a single company try to spread your investments across several companies. That way if one company goes down it will have less damage on your overall share portfolio.

Your shares will be held in an online portfolio which will also hold information about current share prices and any profit or loss you may have incurred. It’s best not to trade your shares too often as you will probably be charged per trade and these charges can add up and eat into any profit margins.

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