<Share dealing

Online stock trading is often referred to as "share dealing" or "share trading". Both terms translate to the buying and selling of shares in public limited companies (PLCs), which are listed on the stock exchange.

Even though interest rates are now higher than the historical lows during the pandemic, the return on investment on stocks and shares almost always outpaces what most savings accounts offer, but as always that comes with risk attached.

A share is a unit of ownership in a company. Stock trading involves buying and selling shares. One simple form of trading is to purchase shares in publicly listed companies – such as Amazon, Google, or Tesla – and then sell them for a profit if the price of the stock rises.

The price of a single share in a company is calculated by dividing the total market value of the company by the number of shares.

This price rises and falls due to various factors, such as the company's performance or the implementation of new government regulations. Global events can also play a part: the pandemic and turmoil in the Middle East are prime examples of this. Such factors affect the demand and availability of a company's stock. If there are more buyers than people willing to sell, the price will likely rise. If there are more sellers in the market than buyers, the stock's price tends to drop.

How to trade stocks or shares?

You can trade stock using desktop software, web-based platforms, or smartphone apps. When comparing the best trading platforms, it pays to think about the following factors:

Fees

Most online market trading platforms charge a fee for each transaction, as well as monthly or annual fees. This is the case whether you want to buy or sell shares. The fees you pay can vary depending on the amount of money you invest, the number of trades you make, and the types of investments you choose.

Ease of use

Often you need to respond quickly to market changes, so a share-dealing platform that is easy to use and lets you make fast, accurate, hassle-free trades is a must.

Access to research

The best share trading platforms offer real-time market updates along with analysis from brokers about different stocks. This intel can help inform your trading decisions.

Trade options

Look at what options are available for you to buy or sell shares. Can you automate transactions to happen when a stock reaches a set price? Do you have the option to create stop-loss orders? These types of features are worth seeking out because they help to manage your risk.

Margin loans

Some people borrow money to help build their investment portfolio. If you want to do this, check to see if your share-dealing platform or online broker offers margin loans.

Security

How secure is the platform? Security is vital to make sure your funds are safe. The best trading platforms have robust security features to protect your money.

Only invest what you can afford to lose

Stock trading is a risky venture: the value of stocks can rise and fall due to external economic factors. As a result, you may get back less money than you originally invested.

Start with small investments

It's a good idea to give yourself time to get used to buying and selling stock via trading accounts. This is especially true if you're new to trading shares in an online environment.

Do your homework

Investigate each company before trading in their stock. Visit their website to find out what they do and how they are performing. You should also check for economic news and trading reports.

Golden rules for stock trading

Jargon buster

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About the author

Lucinda O'Brien profileLucinda O'Brien
Lucinda O'Brien has spent the past 10 years writing and editing content for regional and national titles. She applies her industry knowledge to ensure readers can make confident financial decisions.

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