One can only shake their head and marvel at the thought of a pre Internet world. It has changed almost every aspect of daily life and continues to affect various industries as we move into a very technical future. Trading is one industry that has been completely revolutionised by the online factor, and therefore modern day, online trading has garnered an assortment of differences to its offline counterpart. Let’s weigh the two up and see how they compare.
The Broker Factor
Traders who embraced the online revolution in years gone by will remember the days of needing to go through a broker when electing to make a trade. Today it isn’t necessary to go through an offline broker as we now have online brokers.
Online trading has made it unbelievably easy to connect with other traders. Learning about foreign markets, spread betting, instruments and various other bits of information can be obtained by connecting online and employing, for example, the services of City Index, renowned for spread betting in a wide range of markets worldwide. Offline trading obviously doesn’t carry this benefit, as one will be required to make physical visits to seminars, or go out and meet people with similar interests.
Differences in Cost
The costs of setting up a brokerage firm can get fairly sizeable. Staff needs to be hired, rent needs to be paid and all the realities of not being online result in general higher costs of operating. Therefore, offline brokerage charges are always usually higher than online as the clients supply the revenue for costs to be covered. This isn’t the case with online brokers, as the overheads are much lower with regards to running a daily operation. As the popularity in online trading grew it also meant more online brokers starting popping up, resulting in online fees dropping in the midst of a competitive industry.
Jumping onto your computer, mobile or tablet and selecting your trade is just easier and quicker than making offline trades. This is the case with most industries, and the convenience factor will usually win out at the end of the day. Offline trading means having to visit a broker’s office to sign papers while making trades requires you to pick up the phone and make calls. Online trading eliminates this hassle. Trading on your mobile device also means you can be anywhere to make trades.
Convenience is also seen with online trading due to the trader not having to jump between different means to make all their trading activity possible. Offline trading means having to access your bank account, do research using the material you have had to actively go looking for, and then contact the broker to make the trade. An online trading platform means that traders have access to their funds, trading information and buy/sell requests all in one place. This alone makes online trading so much more appealing and clutter free.
Up To Date Trading Info
Offline trading can make it difficult to keep an eye on what the markets are doing, as you might need to be watching Bloomberg or reading newspapers. Going by personal tips is also quite popular among offline traders. However, with online trading, you have the ability to stay on top of market activities at all times of the day. Based on this constant access to market info, trades can be made at short notice and using to-the-second data.