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Online trading has become a household term in every homestead across the country. It continues to widen in popularity and in particular among the young folks. Online trading has been widely embraced by millennials and Generation Y partly due to the prevalence of Smartphone use among these two generations. More than 15 million households have signed up to various online trading platforms. The big question is “why is online trading becoming so familiar with the millennials and generation Y?” Below are some points that explain the scenario as it is.
Lower fees
Online trading offers a reduction in transaction costs and the high fees associated with the traditional brokerage firms. According to Bloomberg stock reports, you only need between $5 and $10 to buy and sell stocks on stock exchange markets such as CMC markets. It is also possible to exchange traded funds at online discount brokerages for as little as $10. Start up brokerage firms offer ETF or stock trade for as little as $4.95 per ETF.
Online trading eliminates instances of brokerage bias
Online trading brings trading into your hands which eliminate any possibility of broker bias. In traditional trading, the broker may offer financial advice that favours him/her. With online trading, you eliminate any possibility of dealing with an ethically questionable or biased agent who works to benefit his/her interests at the expense of your investment.
Online Trading offer investors an opportunity to monitor their investments in real time
The modern day online brokerage firms offer advanced interfaces which enable investors to see how their money is performing throughout the day. It is possible to log in from your Smartphone and tracks your gains or losses in real time. The young generation’s love the flexibility and total control offered. The brokerage firms also provide advanced analytical platforms and research reports to help investors make informed decisions.
Most young people are used to online news and research
Online trading tends to favor millennials who are never used to rely on newspapers or television as their only source of news. The young people who own powerful smartphones can find out about any event anywhere in the world instantly through user generated content and blogs. From this experience, the idea of keeping their fingers on the pulse as online traders come naturally. Generation X are used to finding out how to solve their problems through a simple online search. Researching about things that they can stake their money on comes as a simple task to many of them. These tech-savvy individuals have the ability discover different trends in socio political events which may end up affecting market trends. All these makes online trading more intuitive to them than to the older generations who are used to struggling to find out the important news.
More control and flexibility
Time is a precious resource to online traders. Trading portals provide investors with the necessary speed which is more beneficial to the investors. With online trading, you can execute a trade almost immediately from your personal computer or Smartphone. In the traditional setup, you need to book an appointment with the broker to initiate a trade which may take you days to weeks. The time involved in such transactions doesn’t sit well with the internet generation who believe in speed.
Online trading has eliminated the dominance of middlemen
A few years ago, it was impossible to make a trade without meeting a broker. With online trading, making your first trade is simply few clicks away. By eliminating the middlemen, online trading has attracted those individuals who were lacking the finances to work with a broker in the past. With online trading, it is possible to buy or sell without talking to anyone.
No limit to investment
Some online trading platforms don’t restrict customers to investment limits which is untrue for offline brokers. The stock offices have restrictions on the maximum amount of trades an investor can own. They impose such restrictions to take advantage of the investors. Most important is that you can’t trade a single stock with an offline trader, something that online platforms don’t have any problem with.