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Since the British voted to leave the EU in the 2016 referendum, UK equities have underperformed significantly yearly. The coronavirus pandemic in early 2020 made matters worse and pushed the British economy into its worst recession in 300 years. This has fueled an exodus of institutional money out of UK assets into markets offering better yields, such as US technology stocks.
However, receding asset prices in recent years have made shares on the London Stock Exchange one of the cheapest stock markets in any developed country, so shares trading in the UK can be very convenient. This is just one reason investors want to better understand the effect of Brexit on the stock market, as the long-term opportunities could prove very attractive.
The chart below shows how the FTSE 100 – an index of the 100 largest stocks listed on the London Stock Exchange – underperformed other major stock indices such as the S&P 500, MSCI Emerging Market and the Stoxx Europe 600 index after the Brexit vote.
What is Online Trading?
Online trading is the buying and selling of financial securities via the internet. Buying and selling are done through software which is usually called a trading platform. Financial companies called online brokers to create and make trading platforms available to customers. Brokers buy and sell securities on behalf of their clients and charge a commission for the trades they execute. Brokers can be banks, SIMs or companies specializing in online trading. And for non-professional investors, home banking can also be used.
Why Trade Online?
Online trading is an inexpensive tool for investing money in the stock market. The commissions are low, and you can access real-time quotes and charts, technical and fundamental analysis of financial stocks, and much more. The investor needs to make the right investment choices at the right time. Online trading lets you view everything instantly and in real-time. We start with the premarket, the opening, closing, and even the after-hours for shares.
Most investors use the TOL to invest in stocks. Then you have access to the listing of investment funds, government bonds, CWs, etc. The working hours for investing in shares of Piazza Affari can be compared to that of an ordinary job. Opening at 09.00 and closing at 17.30, excluding the auction market. In addition, with the after hours, we also work overtime.
For Whom Online Trading is Suitable?
Online trading is suitable for those who want to invest money independently. But to take advantage of the independence that the TOL makes possible, you have to work hard: study, apply your strategy and resist market pressure. The financial markets are, in fact, very complex and, above all, unpredictable places. This is why you need to study a lot and, above all, continue to do so to define and adapt your operations to possible changes in the scenario.
The fickleness of the markets also tests the character of the trader. It is not easy to maintain an operational program when the market says otherwise, i.e. when quotations go down instead of up. For this, you need the right character not to get overwhelmed by emotion. And the expertise to understand when it is essential to change the approach.
How to Trade Online?
You have to do it through a broker because you cannot operate directly on the financial markets. The financial broker is an intermediary who buys and sells securities on behalf of the client. To trade, you must therefore register with a broker, i.e. open an account. Typically brokers offer a platform with which the customer can send the broker the purchase and sale orders of the securities he wants to operate.
How to Choose the Broker and the Platform?
Several brokers operate in Italy. And every broker offers a trading platform. Many also offer a demo version with which you can start gaining experience without risking real money, and you can evaluate the platform itself. The things to consider when evaluating a trading platform are:
- Ease of use of the same;
- Availability of an unlimited and free demo version;
- The level of the minimum deposit to start trading;
- The availability of the assets on which to operate;
- The presence of advanced trading tools.
The different features take on different importance according to the level and experience of the trader. Those who start, for example, may prefer platforms that are easy to use and do not ask for a too-high minimum deposit. While a more advanced trader might prefer platforms that offer many tools to trade and the ability to use advanced tools. There is, therefore, no better broker than others ever.
And of course, you have to consider the costs, to which you must pay particular attention.
The Costs of the Online Trading Platform
The costs vary according to the services offered and the reliability and functionality of the platform used. They usually have a monthly fee, which can be repaid based on the executions made. For example: if you make 20-30 executions in a month of buying and selling, the platform is free.
Others allow you to operate in Push (i.e. you can see price changes in real-time) but have limited functionality. It all depends on how and what you want to do. Logically, professional traders use up-to-date and reliable platforms. With the trading platform, we have our current account under control. Therefore, the balance is always visible and updated, with each operation made and full availability to operate on the financial markets with a click.
