Help With Trading Shares Online

Want to start trading shares online but not sure where to begin? Don't worry, help is at hand with our essential guide.

Online share trading involves the buying and selling of shares online. It's something that is accessible for the likes of you and me, with more than 1.5 million execution-only online share trades estimated to have been undertaken in the UK last year (an execution-only trade is one where you do not take any advice from a stockbroker - you are simply buying or selling shares that you choose).

How do I start trading online?

As was mentioned in the introduction to online share trading above, this method of entering the stockmarket is now very accessible.

To begin, you'll obviously need a computer with internet access. If you're already reading this article online then we'll assume that's not going to be an obstacle!

Most online share trading systems don't require a particularly high-specification PC in order to allow you to use their share trading system but it's always worth checking before you begin.

The most common form of trading for many is what is known as execution-only and this is what is offered by online stockbrokers. With this form of share dealing, you will be left to your own devices to choose which shares to buy and sell.

If you want advice on which shares to trade in then execution-only trading may not be for you. Some online stockbrokers will provide you with advice (for a fee), as with traditional stockbrokers.

How much will it cost?

There are costs involved with online share dealing, though such costs have been falling and are now at relatively low levels.

You'll firstly need to be aware that stamp duty is applied to purchases of shares (both online and offline). At the time of writing, the level of stamp duty is set at 0.5% of the purchase price of shares, assuming that you are purchasing a value of shares less than £10,000.

You will also have to pay a fee for each transaction (purchase or sale) that you carry out. Some online brokers charge as little as £10 per transaction, although you should be aware of any additional costs that may be charged to set up your account.

In general, you should find that online execution-only dealing is cheaper than older style dealing, which typically could have been carried out over the telephone or via a bank or similar financial institution.

Previous: Stocks and Shares Explained Next: Help With Trading Shares Online
Free Guide to Shares