How it works

Dealing UK shares online can be a simple process. One of the reasons online dealing can be cheaper than traditional broking services is because it is usually based on execution only services. This means you take the decision whether to buy or sell the shares, rather than seeking advice from the broker.

In other words you become your own broker. This has only been possible because of the surge in share and financial information available online through broking web sites, and rich information sources such as DigitalLook.com. This empowers investors to research shares thoroughly before committing to a transaction.

Using a real time Online Broker you can call up the current prices for the shares you want to buy and sell. (see How to get started)

There will be a purchase price and a selling price for each share.You then choose whether or not to trade.

Normally you will have a set time to make your decision. For example you may have 15 seconds to decide whether to accept the price given to you.

If you decide to trade you can do so at a click of a button. The brokers' system will then complete the trade, and should confirm the transaction online.

The money will either be credited or debited to or from your account and a share certificate sent to you if appropriate (see Practicalities)

But remember, just because a trade can be carried out in seconds does not mean you should make a rash decision.

In the US the emergence of online trading has lead to 'Day Trading'. This is where investors deal in and out of shares very frequently in an attempt to make a quick profit.

Day Trading has become more prevalent in the UK. However, it is not recommended for the novice investor. It always pays to research shares carefully and invest wisely.

Investing in shares over the long term has proved to be a more lucrative form of investment that simply sticking money in the bank.

However, share markets can be volatile. Therefore it pays to monitor your portfolio closely, so that you are fully aware of any news or information that could affect the value of your holdings.