Standard Chartered Online Trading

Before you hit “Buy” or “Sell”, read on to find out the five trading habits you should keep in mind when you trade online.

Whether you’re just dipping your toes into the financial waters or you’re a seasoned investor, deciding when, how and why you should invest your money can sometimes be tricky. To minimise the guesswork, here are some points to take note of before you start trading.

1. Diversifying across markets

If you are putting all your investment eggs in one basket, you may be exposed to concentration risk — the risk of amplified losses that may occur from having a large portion of your holdings in a particular investment, asset class or market segment relative to your overall portfolio.

To manage concentration risk, you first need to know how it might occur. For example, did you place all your investments in one stock, or did you invest within the same industry, geographic region or security type that tends to highly correlate?

To counter this, perhaps you can look at diversifying across markets. Most online trading platforms offer accessibility to more than one stock exchange. For example, on Standard Chartered’s platform, you can get connectivity to equities and exchange-traded funds (ETFs) across 15 stock exchanges in 10 countries across the United States, Europe, Asia and Australia.

2. Do your homework

Doing extensive research and understanding the financial markets can help you to make more informed investment decisions.

Most online securities trading providers provide you with access to technical and fundamental information of a particular security. You can find information, usually on the research or stock quote tab, regarding the security’s key financial data, such as price-earnings ratios, earnings per share, dividend yield, balance sheet and income statement. There will also be a newsfeed panel to provide you with the latest and past market news. Hence there is no need to log out of the platform or go to other news portals to search for such information. On Standard Chartered’s platform, all the essential information is housed under one roof.

3. Do your sums

Besides brokerage charges, there may be other costs involved when you place an order. This may include custody fees, foreign exchange charges and a minimum flat fee requirement. All these costs can diminish your gains. Standard Chartered’s online trading platform lets you trade with low brokerage fees and zero custody fees.

4. Financing options

When it comes to trading stocks, having access to liquidity is essential as it will impact your ability to enter or exit a trade. Many online trading platform providers offer a share financing facility to meet your liquidity needs. Some like Standard Chartered provide Extra Purchasing Power to their clients. This means that the sales proceeds from your sell trade are immediately available for your next investment purchase. There is no waiting time.

5. Use smart trading tools

Stock prices rise and fall. One way to protect your gains or minimise your losses is to set a limit to the losses that you can tolerate.

To limit your losses on a particular position, some online trading platforms – such as Standard Chartered’s – have a Stop Loss order option, where it will automatically sell a security when it reaches your pre-determined price.

If you have no time to monitor the price movements, having a Stop Loss order helps, especially if a stock price moves down sharply, instead of in a gradated manner.

Standard Chartered’s online trading platform also offers GTD or Good till Date (order type). By selecting GTD and indicating your preferred period of validity, there’s no need to re-enter your order if it didn’t get filled. The order will simply be rolled over to the next business day.

For more information on Standard Chartered’s online trading platform, click here

The information provided in this piece is not to be taken as investment advice.