What are the Risk Involved in Online Trading?

Just as online trading is convenient and simple, it also overly relies on technology. Hence, any technological risk automatically gets transmitted and becomes the risk of online trading One of the big online share trading risk is the issue of security. Unless you take care of this security risk, risk of online trading can get magnified to a great extent.

Here we look at some of the key online share trading risks and how to overcome them.

Risk in Online Trading?

Gere are some of the risk of online trading encapsulated for the benefit of users of the online trading platform.

  • The first risk of online trading is the risk of technological disruptions. You can face hardware problems, problems in internet connectivity, problems at the internet website, problems in the trading mobile app etc.

  • Security of access is important as this is the time hackers can hack into your data and misuse your trading account. The best way is to use some basic precautions. For example, you can use dual authentication for your trading account and make it a point to not leave your trading account unattended and logged in while you are not on your seat. Make it a point to log out of your trading session even if you are just stepping out for a short period.

  • One thing that can make a mess of your online trading system is the risk of virus and malware. The best thing for you to do is to ensure that your computer is equipped with an antivirus protection as well as an anti-malware protection. Also get it updated regularly before it expires. If you allow your PC or laptop to be hacked, then you could lose precious trade data to hackers and that is a real risk in online trading.

  • One risk of online trading is not changing your password on a regular basis or making it too obvious. Make it a point to change your trading password at least one in 15 days. This will sharply reduce the chances of your account being hacked. Additionally, avoid obvious codes like your name, date of birth or marriage anniversary as your password. Ideally, use an alphanumeric password with special characters to make the entire process complex.

  • It is important where you access your online trading account from. For starters, you must not access your online trading account from a cybercafé or from a public Wi-Fi system. These are normally not secure connections and the risk of your account being hacked is quite high. Ideally, use only your personal computer and do not share the computer with others for your own safety.

  • Having seen the technology related risks, here is one practical risk. What if the system goes down with just 30 minutes to go for trading. You need to close all your open trading positions. In such cases, you can always use the call-n-trade facility to address the problem. It can be a good standby temporarily.

Online trading is simple and efficient. That is because; you are not constrained by space and time. You can place the orders at the time and place of your choice. Apart from convenience, there is flexibility. But there are risks too and you just need to manage these risks better.

How does the Online Share Trading Works?

Online trading followings the same trading protocol, wherein you place the order, then confirm the order and the order gets executed. You can monitor the entire process flow of the order from end to end using this mechanism.

Brokerages for Online Trading?

There are no fixed charges but the thumb rule is that the brokerage for online trading is normally lower than the brokerage for offline order placement. Most online traders try to be competitive with the discount brokers, at least for the high value and high brokerage premium clients.