| Before discount stock trading came along, if you | | | | broker, which gives you easier access to advice and |
| wanted to trade in stock, you had to instruct your | | | | other services, including insome cases actual trading |
| broker by telephone, tell him which company you | | | | on your behalf in accordance with your instructions, |
| wished to invest in, what class of shares and how | | | | most online clients opt for discount stock trading. |
| many you wanted to buy, and your broker would | | | | They don't have the full range of services but they |
| then have to call his agent at the stock exchange | | | | don't mind that because they are paying lower fees. |
| who would then have to use a peculiar hand signal | | | | So discount stock trading (which includes discount |
| language to buy the stock from a stock jobber and | | | | futures trading) consists of using the facilities of an |
| then report back all the way down the line . . . All in | | | | online stock broker with minimal personal attention |
| all, quite a rigmarole. | | | | from the stock broker called for. This usually means |
| That's how it was done in England, and much the | | | | that the client uses the interface provided by the |
| same kind of convoluted system applied in most | | | | stock broker's web site in order to buy and sell stock |
| other countries with a stock market. Oh, and you | | | | and other securities. |
| would invariably pay your stock broker a handsome | | | | Once you've decided to start discount stock trading |
| sum on each transaction, for managing the whole | | | | you should select a suitable online stock broker. It's |
| process, including the stamp duty impressions on the | | | | vital to choose one with an online system that you |
| share certificate. It could take weeks to finalise the | | | | can use easily, and easy access to telephone help if |
| purchase of some stock. | | | | you should need it. There are hundreds to choose |
| In the late 1980s all this was swept away. In the UK, | | | | from, but if you're a beginner you should seek |
| where the whole system had been pioneered in the | | | | recommendations from experienced traders. Check |
| eighteenth century, the roles of stock brokers and | | | | out the online forums. Just type "stock trading |
| stock jobbers were combined into that of "market | | | | forums" into your favorite search engine. |
| makers", though in practice they are still called stock | | | | If you find one or two online brokers that you |
| brokers. Similar processes of modernization took | | | | believe will suit you sound out other people on the |
| place in other countries. | | | | forums as to their opinion. In particular watch out for |
| Stamp duties were largely abolished and the coming | | | | hidden fees or poor client service, especially if you |
| of the internet has transformed stock trading yet | | | | are starting out. Make sure your chosen broker |
| further. Stock brokers were quick to see the | | | | operates "demo account" facilities so you can |
| potential of online trading, with its lower costs and | | | | practise trading before committing yourself with real |
| increased profits. Whilst large sums had to be | | | | money. |
| expended on custom software that could serve the | | | | You will be required to open an account by making |
| requirements of clients, at the same time an | | | | an initial deposit of between $500 and up to around |
| explosion in online trading meant more turnover and | | | | $2,000. This is more than anything just to check that |
| more profit. | | | | payments and receipts to and from your bank |
| It wasn't long before the lower costs allowed stock | | | | account can be handled smoothly. This will take a day |
| brokers to entice people who had hitherto not been | | | | or two to organize. You can then deposit further |
| inclined to trade on the stock market, by offering a | | | | amounts if you wish, and in any event commence |
| discounted service for a discounted price. Whilst you | | | | trading. |
| can still have a managed account with a stock | | | | |