What’s an online broker?
An online broker is the ‘middleman’ between buyers and sellers of financial instruments. Brokerages charge traders a fee or commission for facilitating the purchase and sale of assets using their platform. They often invest in high-performance technologies to enable their clients to get exposure to a wide range of markets and tools.
What’s an online brokerage account?
An online brokerage account is a trading account that you open with a broker. When trading with us, you’ll open a CFD trading account. You’ll use it to trade financial securities.
This is also where your profits and losses will be recorded. You can fund your trading account with your broker and withdraw money if you have any available.
Having an account with an online broker means you can trade a variety of markets. Trading means speculating on asset prices without owning them.
How does a brokerage account work?
Deposit funds - once you’ve opened a brokerage account, you can start depositing funds. You’ll use these funds to trade. Some brokers expect you to deposit funds immediately, while others only require you to add money when you want to start opening positions.
You can often use a variety of methods to fund your account, such as direct deposit, credit card or PayPal. This could differ from broker to broker.
Pick a market to trade in - think of your online brokerage account as the doorway to the financial markets. Your broker will offer a selection of markets to trade – it’s up to you to decide which markets you’re interested in.
Consider your position size and cost - once you know which markets you’re going to explore, it’s time to consider the size of your positions and how much capital you’re going to put towards them.
You can decide how big or small you want your positions to be, but sometimes certain minimums will apply. Remember, both your position size as well as the price of the instrument need to be factored into the cost. Plus, other fees and charges may apply.
Study market movements - your broker is not in charge of your online account – you are. That’s why it’s important that you study market movements and keep a close eye on your open positions.
Everything you do on the online account carries risk, so make sure you understand the ins and outs of the account, the platform you’re using, as well as the market you’re trading.
If you want access to a brokerage account, you can open one with us and start trading over 13,000 markets. The account will enable you to buy and sell assets – by speculating on their price. We’re the world’s No.1 provider1 and we have over 313,000 clients worldwide.