Offline vs Online Stock Trades

Should You Trade Offline or Online?



Online stock trading has become very popular these days. And online brokers like Scottrrade or Sharebuilder do offer

How Should You Trade Stocks?

a lot of services. In addition to cheap stock trades, they have a range of online services that can help market investors watch the market, learn more about the art of trading, and manage their personal portfolios. But the traditional stock broker has not become a dinosaur yet. He or she still brings value to the table in exchange for a higher commission structure. Let us examine the advantages of each method of stock trading.

Offline Stock Trading Versus Online Stock Trading

Offline Stock Broker Advantages

  • A broker is licensed and regulated by a government authority. He or she should conform to a standard of ethics that the authority insists on. Of course, as we have seen on the news, there are a small percentage of brokers who have not conformed to these ethical standards.  When you are seeking an offline stock broker, you should check them out just like you would check out a doctor or auto mechanic.
  • A broker can help you learn the ropes. They can explain the reasons they recommend a certain stock for an individual like you. As with any service professional, they should listen to your needs and goals, and then tune their counsel to conform with your goals If you are very new to investing, or not interested in taking up trading as a second job, a professional broker can be a very good choice.
  • Even if you have some stock trading experience, it still may off to consult a professional who does this sort of work for a living. They bring another perspective to the table, and may have some insight into details about the larger economy that you never thought of.
  • A broker can manage your portfolio. They should keep it up to date, and they should keep you informed of market changes. If you are not into managing your own portfolion, the services of a qualified stock broker could be very valuable.

Online Broker Advantages

  • These days, online brokerage services usually come with a variety of tool to help you make wise investmet decisions. Some will even have a system that “interviews” you with questions about your financial goals, and then comes up with automated suggestions for your portfolio.  They also have online systems to help you analyze and track stocks, manage your portfolio, and access reports.
  • Trades are cheaper. Online stock brokers can be a lot more efficient because you can automatically place your own trades. The commission structure will be lower, so you will pay less. Keep in mind that you can get hit with some hidden fees, so that online brokerages are not always as cheap as they look. For example, you may be able to take advantage of $7.95 trades, but then have to pay an extra $9.95 to move money from your bank account.

Should You Use a Financial Pro or An Internet Broker?

Really, the choice is up to you. If you would feel more comfortable using an established stock advisor, then it may be very valuable to find a stock broker even if he or she charges more to make a trade.  If you are a “do it yourself” sort of money manager, then online brokerages may be perfect for you.

Join the forum discussion on this post

You must be logged in to post a comment.