Online Trading Accounts provide an execution only share brokerage service. This means that they process transactions as instructed by the user. They do not actively manage your money or advise you on which shares to invest in.
Online Trading Accounts first appeared in the United States in the late 1990s. Growth was driven by the increase in people investing directly in the stock market during the dot com boom. Since the dot com crash the number of providers has nearly halved.
Despite this both the number of online investors and overall transactions continues to grow. The main drivers are the lower trading costs and increased flexibility of being able to manage investments 24x7 associated with self service channels.
Most revenues come through the various fees and charges levied. These are split between regular subscription fees and transaction charges. All online trading accounts offer a similar set of basic services. The different brokers tailor these services and the associated charges towards different types of investor.
If you need more information to decide which Online Trading Account is the best for you, then check out
TheRateTart Guide to Online Trading.
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