Share trading platforms

Online share trading platforms have made trading and investing in shares more accessible and made broking accounts and transactions less expensive.

By   |   Verified by David Boyd   |   Updated 14 Aug 2024

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Comparing share trading platforms

eToro

On website

eToro AUS Capital Limited AFSL 491139. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Featured

eToro

Brokerage Fee

$2.00

Tradable Assets

Crypto, Shares

Tradable Indices

N/A

Signup Bonus

None

Highlights

  • Trade and invest in top financial instruments, including a wide selection of stocks.
  • eToro is regulated by CySec, FCA, and ASIC.
  • Your funds are protected by industry-leading security protocols.
  • Earn up to 5.3% annual interest on your balance.*

*Applicable to uninvested funds. Your capital is at risk. Eligibility and Terms & Conditions apply.

Interactive Brokers

On website

Brokerage Fee

$1.00

Tradable Assets

Bonds, ETFs, Futures, Hedge Funds, Mutual Funds, Options, Shares, Spot currencies, US spot gold

Tradable Indices

ASX, KSE, LSE, NASDAQ, NYSE, TSE, XETRA and more

Signup Bonus

None

Highlights

  • Enjoy low commissions and financing rates.
  • Invest globally in stocks, options, futures, currencies, bonds and funds from a single integrated account.
  • Take advantage of IBKR's trading platforms, free trading tools and comprehensive reporting to help you get ahead.
Webull

On website

Webull

Brokerage Fee

$0.00

Tradable Assets

ETFs, Options, Stocks

Tradable Indices

ASX, US markets

Signup Bonus

Get rewarded up to AUD$5,450 when you meet the criteria. Offer ends on 29 April 2024. Terms and Conditions apply.

Highlights

  • Trade AU & US stocks, ETFs, and Options with $0 commission for the first 30 days.
  • Provides intuitive and powerful advanced charts, multiple technical indicators, and premier Level 2 Advance (Nasdaq TotalView).
  • Regulated by ASIC.

Pros

  • Invest from as little as US$5.
  • No deposit or withdrawal fees.
  • Allows you to trade fractional shares.
  • Access to advanced trading tools.

Cons

  • Scarcity of instructional resources for investors.
  • Supports AU and US markets only.
Superhero

On website

Brokerage Fee

$0.00

Tradable Assets

ETFs, Shares

Tradable Indices

ASX, NASDAQ, NYSE

Signup Bonus

Sign up & fund your account with A$100 or more and receive US$10 of Nvidia stocks on Superhero. T&Cs apply.

Highlights

  • Open an account with just $100 and start investing today with a $5 flat-free brokerage ($0 on US shares) on share trades.
  • Buy and sell US shares & ETFs with $0 brokerage plus trade unsettled funds.
  • Fund your account in minutes with PayID and enjoy realtime FX transfers for fast US share trading.
Pearler

On website

Brokerage Fee

$6.50

Tradable Assets

ETFs, Shares

Tradable Indices

ASX, NASDAQ, NYSE

Signup Bonus

First investment brokerage free

Highlights

  • Enjoy low, transparent fees.
  • An option to Autoinvest. Set-and-forget your investment strategy.
  • Simply invest into any ETF from one of Pearler's ETF managers for at least one year, and it's free.
  • Clearing House Electronic Sub-register System (CHESS) sponsored.
Saxo Markets

On website

Saxo Markets

Brokerage Fee

From $1.00

Tradable Assets

Bonds, Commodities, Crypto FX, ETFs, Forex, Futures, Stocks

Tradable Indices

ASX, HKEX, NASDAQ, NYSE, TSX and more

Signup Bonus

None

Highlights

  • Invest in 23,500+ stocks from ASX, New York, Hong Kong, and 50+ other global markets.
  • No platform fees, no inactivity fees, and no FX fees on each trade.
  • Analyse, improve and manage your risk using intuitive trading tools.
Tiger Brokers

On website

Brokerage Fee

$5.50

Tradable Assets

ETFs (AU, HK, US), Stocks (AU, HK, US), Options (US)

Tradable Indices

ASX, HKEX, NASDAQ, NYSE, SGX, SSE, SZSE

Signup Bonus

Get 7% p.a. on uninvested cash balance for 150 days valued up to AUD2,877*. Plus get US$30 TSLA + US$30 NVDA shares with accumulated deposit ≥ A$2000. T&Cs apply.

Highlights

  • Available for ASX, US & HK stocks trading, ETFs, and US options trading.
  • Free market data for ASX and US stocks.
  • More accessible investment to all with a demo account.
IG

On website

IG

Brokerage Fee

0.1%

Tradable Assets

Bonds, Commodities, Crypto, ETFs, Forex, Shares, Share CFDs

Tradable Indices

ASX, DAX, LSE, ISEQ, NASDAQ, NYSE and more

Signup Bonus

None

Highlights

  • Get spreads from 1 point on the FTSE 100 and Australian 200, and 0.4 on the US 500.
  • Give yourself an edge with the only Australian provider to offer weekend trading on key indices.
  • Better deals for active traders. Get more value with cash rebates.
Moomoo

Moomoo

Brokerage Fee

$0.99

Tradable Assets

ETFs, Shares, REITs

Tradable Indices

AU and US markets

Signup Bonus

Earn 6.8% p.a., get up to 10 free stocks and Brokerage-free card. Terms & Conditions apply.

Highlights

  • Trade blue-chip stocks in AU and US markets.
  • Trade multi-markets and multi-products with a lower commission. No custodian fee.
  • CHESS-Sponsored trading is now available.
  • Regulated by the Australian Securities and Investments Commission (ASIC).
Stake

Brokerage Fee

$0.00

Tradable Assets

ETFs, Shares

Tradable Indices

ASX, Chi-X, NASDAQ, NYSE

Signup Bonus

Get $10 when you fund Stake AUS or a FREE US stock when you fund Stake Wall Street. Do both, get both rewards.

Highlights

  • Get $10 when you fund Stake AUS or a FREE US stock when you fund Stake Wall Street. Do both, get both rewards.
  • Make trades in seconds on over 8,000 ASX and US stocks and ETFs.
  • Clear, simple, and better pricing with no hidden fees.
Selfwealth

Brokerage Fee

$9.50

Tradable Assets

ETFs, Shares

Tradable Indices

ASX, HKEX, NASDAQ, NYSE

Signup Bonus

None

Highlights

  • Open an individual, company, trust, SMSFs or joint account for free.
  • Provides commission-free trading – you'll never pay more than $9.50 brokerage and there are no account fees.
  • Trade with confidence with free trading tools, including market depth and live pricing.
CommSec

Brokerage Fee

$10.00

Tradable Assets

ETFs, Fixed Income Securities, Margin Loans, Options, Shares, Warrants

Tradable Indices

ASX, HKEX, LSE, NASDAQ, NYSE, TSE, TSX and more

Signup Bonus

None

Highlights

  • Join now and enjoy no monthly account fees. Simply select the account that suits you best and you could be trading with CommSec in as little as 5 minutes.
  • Compare & monitor stocks, get expert stock recommendations, and keep your strategy on track on CommSec's great range of research and trading tools.
  • Offers access to over 25 international markets, with expert stock recommendations to help you manage risk and achieve your financial goals.
Bell Direct

Brokerage Fee

$15.00

Tradable Assets

ETFs, Exchange Traded Bond units, Interest Rate Securities, mFunds, Options, Shares, Warrants

Tradable Indices

ASX

Signup Bonus

None

Highlights

  • When you trade with Bell Direct, we give you access to the latest research from the Bell Financial Group.
  • Use Bell Direct’s ETF comparison filter to compare the features of the ETFs in the market.
  • Trade with Bell Direct and you’ll receive 3 bullish and 3 bearish trading ideas each day in your inbox.
Sharesies

Sharesies

Brokerage Fee

0.5%

Tradable Assets

ETFs, Shares

Tradable Indices

ASX, CBOE, NASDAQ, NYSE, NZX

Signup Bonus

None

Highlights

  • Choose from over 3,000 companies and Exchange-Traded Funds (ETFs) across Australia, New Zealand and the US.
  • No minimum investment required.
  • Easy to use platform. Get the tools you need to feel confident, whether you’re an experienced investor or just getting started.
CMC Markets

Brokerage Fee

$0.00

Tradable Assets

CFDs, Commodities, Crypto, ETFs, Forex, Indices, Shares, Treasuries

Tradable Indices

ASX, HKEX, LSE, NASDAQ, NYSE, TSE, TSX and more

Signup Bonus

None

Highlights

  • Trade your preferred instruments such as FOREX, Indices, Cryptocurrencies, Commodities, Shares & ETFs and Treasuries from around the world.
  • Keep your trading costs down with competitive spreads, commissions and low margins.
  • CMC Markets' educational material is written by a team of global market analysts and strategists with many years of experience trading in financial markets.
nabtrade

Brokerage Fee

$14.50

Tradable Assets

ETFs, Exchange Traded Options, Fixed Income, Hybrids, mFunds, REITs, Shares, Warrants

Tradable Indices

ASX, DAX, HKEX, LSE, NASDAQ, NYSE

Signup Bonus

None

Highlights

  • Trade domestic and international shares online from $14.95.
  • Earn a variable 0.40% p.a. on your cash on balances up to $1 million.
  • Trade in the US, UK, Hong Kong and Germany.
OpenTrader

Brokerage Fee

$10.00

Tradable Assets

ETFs, Hybrids, Options, Shares, Warrants, XTBs

Tradable Indices

ASX, CXA, NSX

Signup Bonus

Free 2 months premium

Highlights

  • From just $10 a trade. Opentrader offers some of Australia's most competitive rates on equity, warrant and ETF transactions.
  • Enjoy free 2 months premium.
  • Take advantage of next-gen wealth & investment technology.
Raiz

Brokerage Fee

$0.00

Tradable Assets

ETFs

Tradable Indices

ASX

Signup Bonus

None

Highlights

  • A personalized investment portfolio, no account minimums, no commissions, and fractional investing.
  • Set recurring daily, weekly or monthly
 investment amounts to set aside more.
  • Your money is insured against fraudulent and criminal activity.
Spaceship Voyager

Brokerage Fee

$0.00

Tradable Assets

ETFs

Tradable Indices

ASX, NASDAQ, NYSE

Signup Bonus

None

Highlights

  • No minimum investment, and no fees if your total portfolio balance is less than $10.
  • Low $2.50 fee per month when you have a portfolio with a balance of $100 or more.
  • Choose from three diversified portfolios (Spaceship Universe, Spaceship Origin, and Spaceship Earth).
ThinkMarkets

Brokerage Fee

$8.00

Tradable Assets

Commodities, Crypto, ETFs, Forex, Indices, Shares, Share CFDs, Metals

Tradable Indices

ASX, CXA

Signup Bonus

Open a new Share trading account and get free live data, HIN ownership and 10 free trades.

Highlights

  • Open a ThinkMarkets account and get 5 FREE ASX trades (Terms and Conditions apply).
  • Take advantage of the highs and lows by trading over 15 cryptocurrencies.
  • Use platforms that are powerful, mobile optimized and packed with tools to support your trading style.
Stockspot

Brokerage Fee

$5.50

Tradable Assets

ETFs

Tradable Indices

ASX

Signup Bonus

None

Highlights

  • It's the easy, hassle-free way to build your wealth. No paperwork, no stress.
  • Get access to global portfolios with lower fees.
  • View your personal investment dashboard on any device.
  • Your investments are held safely in your own name under your own individual Holder Identification Number (HIN).
Goodments

Brokerage Fee

$0.00

Tradable Assets

ETFs, Shares

Tradable Indices

NASDAQ, NYSE

Signup Bonus

None

Highlights

  • Grow your money by investing brokerage free, starting with just $1.
  • Commission-free fractional trading in the world’s biggest companies.
  • No bank charges or hidden minimums.
EasyEquities

EasyEquities

Brokerage Fee

0.1%

Tradable Assets

ETFs, Shares

Tradable Indices

ASX, NASDAQ, NYSE

Signup Bonus

$10

Highlights

  • New members get $10 for signing up.
  • Invest in both AU and US stocks with no minimum trades and no platform fees.
  • Simple, low brokerage fee structure. 0.10% for ASX trades and 0.25% for US trades.

Small and medium-sized companies are usually privately owned and have a limited number of shareholders or owners. But once a company grows to a certain size – in either profitability or assets – its owners may decide to list it on a stock exchange in order to access the capital they need for further growth. New shareholders buy shares in the company in an Initial Public Offering (IPO), giving the company the cash it needs to continue or expand its operations.

Shares confer ownership

Each shareholder becomes a part-owner of the company for as long as they hold at least one share, although shares are usually traded in much larger parcels than a single share. Shareholders may receive regular distributions of a company’s profit, based on the number of shares they hold, and these are called dividends.

How shares are traded

Shares can be bought and sold electronically on the stock exchange during every day that the stock exchange is open. The trading of shares is carried out by an intermediary called a stockbroker or share broker (or simply a broker), on behalf of both buyers and sellers. Sellers can nominate a price at which they are prepared to sell a specified number of a particular company’s shares, and buyers can nominate a price at which they are prepared to buy them. When the two prices correspond, a sales transaction can be completed, and a current market price for the shares is established. A broker’s client may also agree to buy or sell at the prevailing market price rather than nominating a specific price.

In Australia, shares are traded electronically on the ASX trading platform, and trades are settled through CHESS (Clearing House Electronic Subregister System).

Why shares are traded

There are plenty of reasons why shares are bought and sold every day:

Long-term share investors

Shares are a popular form of investment, in the hope of long-term asset growth and possibly dividend income. Long-term shareholders are likely to buy or sell shares infrequently, and their activity is better classified as share investment rather than share trading.

Gradual share price movements

As a company’s profitability and assets increase, the value of an individual share in the company will usually increase proportionately, and the market price of the shares on the stock exchange will increase as a result. The converse is also true – companies with declining profitability usually see their share price falling. Individual share prices are also affected by supply and demand, and other factors.

Sudden share price movements

External factors can affect individual, industry-wide, nationwide or even global share prices. Such factors could include the release of profit results or profit forecasts by the company, a natural disaster, a major regulatory breach resulting in a large cash penalty, a sudden shift in consumer sentiment, a change in central bank interest rates, a large-scale war affecting national economies, or a global financial crisis or pandemic.

Short-term share traders

Short-term share traders try to predict or anticipate these more abrupt changes in the price of individual shares, and aim make a profit by regularly buying fairly large parcels of shares when they think the price is lower than it should be – or will soon be – and selling them when they are satisfied with the profit they have made or when they think the price has reached a temporary peak. “Day traders” may try to realise a profit by buying and selling a particular parcel of shares within a day, or slightly longer.

Risks and rewards of share investment and trading

Investing and trading in shares is inherently risky. It’s not like depositing money in a bank account, where you can be reasonably confident that your investment will not grow particularly quickly (given current low interest rates) but nor will it shrink (except in the unlikely event of negative interest rates). Share prices are volatile and can be affected by many factors, just a few of which have already been mentioned. This makes it possible for both investors and traders to lose significant sums.

But along with greater inherent risk there is a greater potential for reward. In spite of wars, natural disasters, terrorism and stock market crashes, Australian share prices have increased by an average of 6% per year over the last century, according to the Reserve Bank. Short-term share trades have a greater exposure to both potential losses and potential gains from sudden price fluctuations.

Spreading the risk

The risk of loss from share trading can be mitigated to some extent by having a diversified portfolio. That’s an elaborate way of saying “Don’t put all your eggs in one basket”. By spreading your investment or trades across a range of shares in different companies and market sectors (e.g.financial, industrial, technology, retail, agricultural) you become less exposed to individual share price fluctuations.

Another way to achieve this is to invest or trade in Exchange Traded Funds (ETFs), a type of tradable security which aggregates a range of shares and other financial investments, creating an automatic spread of risk.

You can also choose to invest in units in a managed fund, a diversified portfolio chosen and administered by an investment advisor. Some managed funds may be listed on a stock exchange, but many are not.

Other types of tradable securities

“Share trading” may be used as an umbrella term for trading in all types or securities or financial instruments listed on a stock exchange, which, as well as individual company shares could include:

  • ETFs
  • Managed funds
  • Options, futures, warrants and other derivatives
  • Fixed income debt securities

Capital gains tax

Any profit you make from buying or selling shares is subject to capital gains tax (CGT) in Australia. Capital losses can be offset against capital gains. Gains made by individual taxpayers may be discounted by 50% if the shares have been held for at least 12 months. The tax rate for net capital gains is the marginal tax rate of the individual in the year they were gained.

However, anyone who engages in buying or selling shares as a form of business income may be able to be classified by the ATO as a share trader, which removes the 50% CGT discount for shares held for one year but confers other tax advantages.

This is general information only and is not intended to constitute tax advice. Consult a tax professional for advice about your personal situation.

Online share trading platforms

You can buy and sell Australian shares and other securities without using a traditional broker if you use an online share trading platform. Signing up to one of these is quick and easy, and they generally have low transaction fees, no account fees for a basic account, and low minimum trading amounts. Some of them offer access to overseas markets, such as the NYSE and NASDAQ in the US.

Online brokers typically offer two types of account:

  • A free basic account with no monthly or annual fee, possibly market price trades only, limited analysis or guidance and delayed rather than real-time market information
  • A premium, subscription-fee account, with additional reporting and guidance, live market data and options for setting a share price at which you are prepared to buy or sell

Traditional full-service share brokers

A full-service stockbroker may be more suited if you feel you need expert advice about buying and selling shares and other securities. Traditional offline brokers will provide market and individual company research, make buy/sell recommendations and possibly create a tailored investment plan for you. As a result, they will usually charge higher fees for transactions and ongoing services.

Some full-service brokers also have an alternative online trading platform.

Cost of share trading

Over and above the purchase price of the shares you buy, there are other fees you may have to pay, including:

  • A transaction fee each time you buy or sell a parcel of shares (also called a ‘brokerage fee’ or ‘commission fee’). Transaction fee structures can vary (e.g. flat fee, or percentage of trade amount, or fees that vary according to the number of trades you make per month). Online platforms tend to be cheaper (e.g. between $5 and $30 per trade), compared with a traditional broker’s typical flat fee of $50+ or percentage fee of 2%+.
  • Monthly or annual account fee charged by some brokers or online platforms for the provision of premium services.
  • Cash withdrawal fees may be charged if you want to withdraw money from the special bank account you usually need to fund your trades.
  • Foreign exchange fees or a foreign exchange margin will be payable if you need a foreign currency account to trade in overseas shares.
  • Inactivity fee, possibly charged if you make too few trades in a given period.

Disclaimer: We put our customer’s needs first. The views expressed in this article are those of the writer’s alone and do not constitute financial advice. Advertisers cannot influence editorial content. However, Finty and/or the writer may have a financial interest in the companies mentioned. Finty is committed to providing factual, honest, and accurate information that is compliant with governing laws and regulations. Do your own due diligence and seek professional advice before deciding to invest in one of the products mentioned. For more information, see Finty’s editorial guidelines and terms and conditions.

Learn about share trading platforms

Find out how to use an online share dealing platform to buy and sell shares and other assets.

  • FAQs

  • Glossary

  • Pros & cons

  • Tips

  • Guides

What is a share?

A share is a unit of equity ownership in a company. It may also used as a basis for calculating the equal distribution of company profits or dividends.

Other terms used, instead of ‘share’ , are ‘stock’ and ‘security’.

How can I buy and sell shares?

To buy or sell shares or other securities on a stock exchange you will normally need to use either a stockbroking service or an online share trading platform.

Exceptions to the need for a broker or trading platform include buying shares directly from a company when there is an IPO, or investing in shares through your superannuation fund.

Who has the lowest fees, full-service brokers or online share trading platforms?

Online trading platforms tend to have lower fees because they offer a lower level of service, although some online platforms offer a premium subscription service.

Can I trade international shares?

Yes. Some online share trading platforms specialise in US stocks (NYSE and NASDAQ) and offer access to other markets as well, such as the LSE or TSE. Transaction and foreign exchange fees can be very variable, so do your homework before committing.

Some traditional offline brokers also offer access to overseas stock exchanges, but often only for very large parcels of shares.

How do I sign up with an online share trading platform?

Signing up with an online broker is quick and easy. They will need your name and contact details, the uploading of some identification documents, and may require you to open a special bank account to fund your trading activity and receive any sales proceeds.

How do I sign up with an offline broker?

Registering with a traditional broker can be more complicated, because they are obliged to assess your financial situation and consider your investment goals. You’ll need to make personal contact with an advisor and complete fairly extensive paperwork and ID requirements.

How do I decide which broker or share trading platform to use?

Carefully compare the services they offer to decide whether they have what you need (e.g. access to overseas stock markets, ability to set specific buy/sell prices, type of reporting, analysis and advice provided). Also compare their fee structure and fee amounts, and how easy it is to sign up and to make trades.

Is there a minimum amount I can invest or trade?

Online platforms may have no set minimum, or a minimum trade amount of $100 to $500. Offline brokers may have a much higher minimum amount that you can invest or trade.

How much does share trading cost?

Online platforms are less expensive than traditional offline brokers, with typical fees ranging between $0 and $10 per buy or sell transaction. But there may be additional fees if you want to opt in to premium services, buy and sell overseas shares, and withdraw cash from your share trading bank account.

Offline brokers provide personalised services, advice and recommendations, and charge much higher fees, typically starting at $50 per transaction or 2% of the amount traded.

What sort of documentation will I receive when I buy or sell shares?

Most share transactions are registered at CHESS in the name of the shareholder, who is issued with a HIN. You will receive a holding statement from CHESS whenever you buy or sell shares, indicating the name of the share or other security, the quantity bought or sold, and the balance of your holding.

Is online share trading safe?

Yes, if you use a trading platform with:

  • A good reputation. Read online reviews to find out.
  • Strong financial backing. Their website should provide details.
  • Reliable encryption technology to protect sensitive information.
  • Secure login and transaction verification methods, preferably using two-factor authentication.
  • Fraud prevention and compensation system, to help detect possible fraud and reimburse any losses you may suffer through fraud which was not your own fault.

ASX

Australian Stock Exchange

ASX Top 50 and ASX Top 100

The 50 largest and 100 largest companies listed on the ASX, with size being determined by market capitalisation.

ATO

Australian Taxation Office

Blue-chip stock

Shares of a major company regarded as a leader in their industry, normally a multinational corporation that has been operating for many years.

CHESS

Clearing House Electronic Subregister System, an ASX computer system used to record shareholdings and settle share trading transactions.

Derivative

A security, sometimes traded on a stock exchange, whose value is attached to a particular asset (such as a share) or commodity (such as a global market for a particular product). Examples included exchange traded options and exchange traded futures.

Dividend

The distribution of some of a company’s profit to its shareholders.

ETF

Exchange Traded Fund, a type of security, listed on a stock exchange, which aggregates a range of shares and other financial investments, creating an automatic spread of risk.

Fixed income debt security

A type of debt security giving regular periodic payments of interest and repayment of the principal on maturity.

Foreign exchange margin

An amount of profit, built into the rate at which one national currency is converted into another, gained by the institution buying one of the currencies and selling the other. It causes the difference between the mid-market exchange rate and the exchange rate actually used.

Future

A financial derivative, possibly able to be traded on a stock exchange, in the form of a contract that obliges the owner to buy or sell an asset in a specified quantity at a specified price on a specified future date.

HIN

A unique number issued by the ASX to clients of share brokers, identifying both the shareholder and the broker.

IPO

Initial Public Offering, when shares in a private company are first offered to the public by being listed on a stock exchange.

LSE

London Stock Exchange

Managed fund

A diversified portfolio of securities chosen and administered by an investment advisor.

Market capitalisation

The total number of shares issued in a company multiplied by the current share price.

NASDAQ

An American exchange for buying and selling securities – the world’s first electronic exchange – where leading technology companies like Apple, Facebook, Tesla, Amazon, Alphabet and Microsoft are listed.

NYSE

New York Stock Exchange

Omnibus account

A custodian model of shareholding, rather than being, for example, a shareholding registered to a specific shareholder under the CHESS/HIN system. An omnibus account is used by a broker to manage the various trades and combined shareholdings of its clients, rather than registering them individually with a third party.

Option

A financial derivative, possibly able to be traded on a stock exchange, in the form of a contract that confers a right, but not an obligation, to buy or sell a particular quantity of a particular security at a specific future date.

Portfolio

A collection of investments held by an individual or organisation, which may include any of:

  • Shares
  • ETFs
  • Managed funds
  • Debt securities
  • Derivatives
  • Other financial instruments

Security

Any financial asset that can be traded, including equity securities (shares), fixed income debt securities and derivatives.

Share

A unit of equity ownership in a company. Shares are also know as ‘stocks’ or ‘equity securities’.

Shareholder

An individual or organisation owning shares in a company.

Share broker or stockbroker

A professional trader, or service company, who buys and sells shares on behalf of clients.

TSE

Tokyo Stock Exchange

Warrant

A financial derivative, able to traded on a stock exchange, giving the holder the right to buy or sell, for example, a share, ETF, debt, commodity, currency, or basket of different securities, at a particular price and possibly on a particular date.

Share trading and investment offers the potential for better returns

In the current low-interest environment, share trading and investment can potentially be more rewarding than bank savings accounts and easier to get into than property investment. IPOs in particular can sometimes deliver rapid profits, although there’s no guarantee that this will be the case.

Share trading is risky

Share prices are volatile, and if you pick the wrong stock, or the wrong time to buy or sell, there is a potential to lose a large part of the value of your investment. Share prices can change quickly depending on factors outside your control.

Share trading can be stressful

You don’t normally need to worry about a bank deposit declining in value. Even a property investment, though it may fall in value, is not likely to do so overnight. But share trading is not for the faint-hearted, and can involve you in a roller-coaster of emotions and nervous tension.

Shares can increase in value over time

Investing in shares over the long term can lead to capital growth. According to the Reserve Bank, Australian share prices have increased by an average of 6% per year over the last century. Some individual shares in the last 10 years have greatly exceeded this performance level.

Online platforms have a low fee structure and are easy to use

Online share trading platforms rely on low fees, simple registration processes and easy-to-use websites and apps to attract customers.

Online platforms provide only limited free service

Unlike more traditional brokers, online trading platforms limit the services they provide, although you can usually opt for a higher service level if you’re willing to pay a subscription fee.

Consider your investment goals and risk appetite

Before you begin, think about your investment goals (e.g. long-term asset growth, retirement fund, home purchase deposit fund, dividend income, short-term trading profits) and risk appetite (i.e. how much you are prepared to – or can afford to – lose, before the risk outweighs the potential benefits). This will help you determine what kind of shares to buy, how long you are planning to hold them for, and how much you are willing to invest.

Acquire some knowledge first

It’s a good idea to familiarise yourself with the ins and outs of the stock market and share trading before you take the plunge into buying shares. This may involve studying the economy, interest rates, exchange rates, overseas stock market movements, company reports, analyst reports, and business news. You may want to make some simulated trades first, by buying and selling notional parcels of shares and working out how much you would have gained or lost had they been real trades.

Compare brokers and online platforms to choose the one best suited to you

You’ll need the services of a broker or online share trading platform to act as your intermediary when buying and selling shares. Carefully compare the services offered before you choose which one (or more than one) to use. Features to consider include:

  • Which sharemarkets they trade in. E.g. ASX only, US markets only, or a combination of ASX and overseas markets.
  • Level of service provided. E.g. performing the buy or sell transaction plus limited reporting and guidance, versus premium reporting and analysis and possibly buy/sell recommendations (this last item from full-service brokers only).
  • Minimum trade amounts, if any.
  • Fee structure and charges for transactions, any monthly or annual subscriptions, cash withdrawals, foreign exchange and account inactivity.
  • Ease of signing up. Online brokers may have a less complicated registration and identification process.
  • Ease of use. You may need to make quick buy or sell decisions, which are likely to be easier using an online platform or trading app.
  • CHESS or omnibus account? Will you own your shares individually via a HIN (Holder Identification Number) registered at CHESS, or indirectly in a combined or omnibus account? The latter can be less expensive and have lower minimum trades, but is also more risky if the broker hits financial difficulties.

Start small if you’re a newcomer to share trading

Don’t rush into the market with large sums of money if you’re not an expert. It takes time to acquire trading competence, and patience to build up a portfolio or realise substantial trading profits. Perhaps put your toe in the water with one of the online platforms that permits small trades and has low fees even when your activity level is small.

Diversify to spread the risk

Diversification, or not putting all your eggs in one basket, is a good strategy to spread your risk. You can do this by aiming to cover a variety of market sectors (e.g. industrial, financial, technology, retail) or by investing in managed funds or ETFs.

Blue-chip stocks usually have better returns and are less risky

Companies in the ASX Top 50 or Top 100, with a large market capitalisation, tend to be less risky to invest in, although they may offer less potential for short-term gains than smaller companies.