Learning how to use online share trading in South Africa is actually fairly easy. You also save more costs that you would by using an actual broker to buy and sell shares. The opportunity to use online share trading gives you the opportunity to save these costs, which of course you could always use then to buy more shares in South Africa. If you are buying shares on the JSE you would still be going through a broker, it just would be cheaper doing it online as you are eliminating the broker who would take commission from the various transactions. Stockbrokers are licensed members of the stock exchange who trade securities on behalf of clients as investors cannot invest directly on the exchange. Speak to the individual stockbrokers on Fees that would be incorporated on your online share trading.
Go through the steps below in order to start to learn how to start online share trading. Please note that this article does not cover any recommendations on which shares to purchase but rather the process that gives one the ability to start online share trading.
Firstly lets begin by describing what a share is. Owning a share means that you own a part of a company. If you own more shares you own more of the company. When you start owning shares you become a shareholder in a company, therefore it is possible to become a multiple shareholder in different companies. Owning a share in a company gives that individual the right to vote on decisions affecting the organisation.
As a shareholder you receive the following monetary benefits are available by online share trading:
- Capital growth – this means that when buying a company’s shares at a lower price and then selling them at a higher price, you make a profit.
- Cash flows (dividends) – this means that when the company performs well and has enough profit, it will reward its shareholders and payout a portion of it to its shareholders.
Instructions to Online Share Trading
- There are many popular online stock brokers and companies that allow you to buy stock online. Your first job is to research and figure out which one best suits you. If you are already at a bank in South Africa some of them offer facilities in online share trading. To buy or sell shares on the Johannesburg Stock Exchange (JSE) you need to open a brokerage account with a stockbroker.
How to open a brokerage account
Online share trading or simply phoning your stockbroker will allow you to invest on the stock market.
Buying and selling ETFs does not require a brokerage account. You can contact the ETF provider directly to invest in these products.
However, owning a brokerage account allows you to invest in all kinds of investment products, not only ETFs.
1. Stay away from online companies that have more bad reviews than good ones. While reading through the different companies that use online share trading, it’s always a good idea to read the reviews and ratings of each of the companies first. By reading the reviews you can tell if the company is worth it. Just stay away from the companies that have more bad reviews than good ones.
2. Next, you’ll want to see if any of these companies offer bonuses or incentives for using their program to buy and sell online share trading. What do they offer that the other companies do not. Many will have bonuses because the online shares market is so competitive, these companies might offer incentives for you to join them. The bonuses are usually laid out online on the homepage or the information page.
3. Signing up is usually a simple step-by-step process. Please have prepared the normal things, such as your name, address, phone number, ID number, etc. to make the process go by a little faster. You may need to wait for approval by the company in order to start online share trading, and may even have to fax over some documentation.
Depending on how much you are willing to spend, always be careful when you’re first starting out buying shares online. I’d recommend starting off investing just a small amount of money as you get used to the ins and outs of the particular online broker you used – and always remember that there is a risk of losing money when investing in the stock market and online share trading