What Are the Benefits of Electronic Trading?


Electronic stock trading, or E-trading, is the practice of buying and selling stock and other assets using an electronic stock brokerage service. Electronic trading services allow users to sign up over the Internet and conduct stock transactions using a purely electronic interface on the Web. Electronic stock trading can have several advantages over traditional trading through a live broker.

Ease of Access

  • One benefit of online stock trading services is that they are easy for anyone to access and use. All that is required to use most online trading services is an Internet connection and funds in a checking account to invest. Accounts can often be set up within a few days and transfers can be made into accounts from a linked checking account on demand, so you can get money into investments quickly if necessary.


  • Another potential advantage of electronic trading is that the cost of transactions can be much less than using a traditional stock broker. Flesh and blood stock brokers are highly trained professionals; when you place a trade with real stock brokers you pay a premium for their time. Electronic trading services are automated, which can reduce the cost of placing trades, allowing electronic services to charge low transaction fees. For instance, Sharebuilder, a popular online trading service, charges $4 per investment when buying shares of a specific stock or mutual fund using their automatic investing tools.

Self-Directed Investing

  • Many investors pay investment professionals to manage their investments for them. While this can have advantages for those who do not understand investing, professional services often charge commissions that can sap investment gains. Electronic investing allows users to direct their own investments and buy and sell whenever they please without having to interact with middlemen.


  • Electronic stock trading also offers greater convenience than using a conventional stock broker. With online trading, trades can be made anywhere as long as you have access to the internet. For instance, if you are on a business trip to China, you could make trades from a laptop at your hotel without having to call anyone. Accounts are typically accessible at any time of the day, allowing users to look over their investments whenever they please.

Subscription Levels

  • Electronic stock trading services may offer a variety of subscription levels for different types of investors. For instance, some accounts are free and charge fees only when you make trades. Others may charge monthly fees, but allow traders to make trades for less money, which can be advantageous to investors that expect to trade often.

Related Searches


  • Photo Credit Anatoliy Babiy/iStock/Getty Images
Promoted By Zergnet


You May Also Like

  • Pros and Cons of Online Trading

    These days, anyone can take a trip to Wall Street just by booting up a computer or mobile device. Almost anything you...

  • History of Online Trading

    The birth of online trading came with the debut of the Internet. Prior to this, everyone who traded placed their order through...

  • What Are the Benefits of Fair Trade Products?

    In the United States, certain labor and trade laws protect workers and employees from unethical, unfair and unsafe work conditions. These laws...

  • Free Trade Advantages

    Free trade requires that the interchange of sale of goods and services between countries occur without government restrictions, quotas, subsidies or duties.

  • The Disadvantages of Free Trade

    Free trade generally is considered an economic good by allowing countries to maximize their production. However, not everyone benefits from this approach.

  • What Are the Advantages of Trade Barriers?

    Governments use trade barriers to foster national security, protect domestic consumers, promote domestic employment and raise national revenue.

  • Global Trade Benefits

    While remaining controversial, global trade, as it becomes freer, carries with it many benefits. Most of these benefits are economic, but there...

Related Searches

Check It Out

4 Credit Myths That Are Absolutely False

Is DIY in your DNA? Become part of our maker community.
Submit Your Work!