Last Updated on Mar 11, 2020 by James W
Like most other industries, the world of financial trading and investment has been altered dramatically by the online revolution. Making an investment once meant using the services of a stuffy stockbroker. There is now a whole range of opportunities to invest online. Here is an overview of just three options.
- Online shares trading
Purchasing and trading shares online is surprisingly easy. There are hundreds of online traders which allow you to search for the company of your choice and then simply click to buy an amount of shares. It really is that simple. Online brokers are often referred to as “discount” brokers, because they generally charge significantly lower fees and commissions than traditional brokers.
The advantages are there for all to see. The big question is whether you can find a reliable online trader? You should certainly do your homework before committing to any specific company. Make sure that they are licensed with the relevant authorities for a start. A good indication of a reputable online broker is a trading platform which includes indices, financial news and other useful investment tools. In addition, some sites offer the chance to practice trading with ‘fantasy money,’ a good way for novices to build confidence.
- Binary options
Financial terminology and products can be intimidating. However, binary options are a very straightforward online investment. Unlike investing in shares, you do not actually purchase an asset when you invest in binary options. Instead, you predict whether an underlying asset will rise or fall in value over a chosen amount of time. The asset in question can usually be anything from foreign currency (Forex) to stocks and commodities such as gold. Binary options strategies are extremely simple. All you need to do is select your asset and the time period of your trade, which is usually anything from ten minutes to the end of day’s trading. Then predict whether your asset will go up or down in value during that time. That is it!
In addition to being extremely simple, there is relatively little risk involved in binary options. Unlike stocks, you don’t need to worry about sharp dips in value which can cost big money. Because you only need select the direction of the trade, rather than how much the asset value will fluctuate, binary options limits the risk involved.
- Bitcoins
Bitcoins are sometimes described as a “digital currency” and they certainly have some value if you make a lot of online purchases. Bitcoins are ‘mined’ using a complex mathematical formula and once purchased they can be used in more than 60 exchanges globally. Of course, you can only trade them with partners who accept Bitcoins as legitimate currency. Most of these exist online, although there are some ‘real world’ outlets which accept Bitcoins too. In essence, they can be a useful tool for bartering online.
As an investment though, you should think carefully before purchasing Bitcoins in bulk. Their value can vary wildly over a short amount of time, unlike regular currencies which usually gradually increase or decrease in value. Bitcoin’s worth tends to be closely related to media coverage of this novel payment system.
Extensive coverage usually leads to a spike in Bitcoin value. On the one hand it means that speculators could make big sudden gains, but on the other hand, you could find that you make quick, heavy losses too. If you are looking for a novel method of payment, you won’t find much more innovative than Bitcoin. Think carefully though about using it as an investment tool.
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