Are There Hidden Costs To Online Share Trading?

While there are few areas of business that the internet has not touched in some way, the financial sector has benefited more than most from the internet super highway. However, while there are many savings to be made by missing out the middle man there are some areas when savings are perhaps not as large as advertised.

One area where online transactions may not always work to the benefit of the customer is online share trading. While commissions are advertised at anything from £5 upwards per transaction, a vast improvement of more traditional offline fees, the online systems may not always work in favour of the customer. When looking at trading online there are a number of issues to consider, including :

Large purchases / sales. If the transactions are in larger amounts than normal, there is a chance there may be a delay if the transaction needs to be completed manually. Prices may move against the trader.

Dealing in fast moving markets. This has been a problem for many traders, in that by the time they have a quote price to deal at, and then given the go-ahead, the price may have changed again. This can lead to a number of delays and re-entries and end up with the customer “missing” their price.

Any of the above situations may well end up with the customer paying more for share purchases, or selling shares for a lesser price than originally indicated. While there are great benefits to trading online, you need to be aware of the potential pitfalls, which are not always made clear on many of the popular trading sites.