An online trading terminal goes by many names, including a trading platform or a stock buying website. Many stock buying brokers and firms have set up online trading terminals so customers can buy and trade stocks throughout the day without needing the assistance of a broker. However, not every online trading terminal is the same. If you are looking to select one so you can trade stocks online, here are a few of the factors you should consider.
What the Minimum Requirements Are
Almost all online trading terminals have a minimum requirement. This requirement may state that your stock portfolio remain above a certain amount, what the minimum purchase price is when buying stocks, or how many transactions you complete a month. This is to prevent someone from buying a single share of a low stock, such as a $1.00 or $2.00 a share stock, and just leaving their account there. This costs the company more to maintain than they make, which is why the minimums are put into place.
What Fees You Are Charged for Using the Trading Terminal
Another factor to consider is what fees you are charged. Some companies charge per transaction, some take a percentage of your buy-ins or cash-outs and others charge a flat monthly fee. Some companies will waive these fees if you already have a broker and are looking to dabble in online trading yourself and use the same broker's online trading terminal.
How Quickly Your Transactions are Processed
As you look for an online trading terminal, one of the most overlooked factors to consider is how quickly your transactions are processed. Many people make the mistake of thinking that the transaction is immediate. As such, they may buy a stock when it dips, thinking they are locking in a low rate. In reality, most companies do not trade immediately. They may process transactions hourly or one or two times per day. Always know when your transactions are processed, as it can affect the price you pay for stocks.
The Ways You Can Deposit or Withdraw Money
Lastly, pay attention to the various ways you can deposit or withdraw money from an online trading terminal. Some will deposit the money into your bank account right away, while others may take a few days to process transactions. Some companies may only send checks. Always consider how you can fund or withdraw money from your account to help find the option that is fastest and most convenient for you.
Every online trading terminal operates differently. Learning what factors you should consider when picking one will help you select the right one for you.