International Networks To Make Online Trading A $12 Billion Industry
Trading has gone global over the last two decades thanks to the internet. Of course, there have always been financial markets and traders operating in countries around the world.
However, since the internet made the industry more accessible to retail customers, it’s grown significantly. According to data available from Statista, the global online trading market will be worth more than $12 billion by 2028.
The proliferation of online trading is down to technology, lowering the barriers to entry. For example, a trader in the UK can buy and sell contracts for the difference via their computer using leverage between 30:1 and 2:1. These conditions are defined by the Financial Conduct Authority (FCA) and something all licensed online trading platforms must abide by when they operate in the UK.
A Global Network Of Traders
In the same way someone in the UK can trade CFDs online, traders in Germany, France, and elsewhere in Europe can do the same. These provisions aren’t confined to Europe. Online trading has also gained traction in Asia. For example, a Thai speaker who Google searches the phrase “วิธี ใช้ mt4 บน มือ ถือ” will find out that CFD trading is made possible by software known as MetaTrader 4 (MT4). By creating an account with an online broker such as INFINOX, traders can go long or short on equities, commodities, and forex.
What does it mean to go long or short mean? Well, if you’re a novice trader, online platforms teach you. As part of lowering the barriers to entry, brokers have onsite guides that explain the basics of trading, regulations, analytics, and everything else needed to get started.
In tandem with locally regulated trading conditions, desktop and mobile software, and trading guides, online brokers have reduced the costs associated with trading. Like a lot of online businesses, operators rely on volume to make a profit. That means they can charge lower fees compared to a broker who only works with clients on a personal basis. Online businesses also have fewer overheads because they don’t need offices and their associated costs.
Lower Costs Mean Lower Barriers To Entry
Tighter spreads (the price difference between the market price and the price you pay) mean novices don’t have to risk amounts they can’t afford. Traditionally, trading was reversed for high-net-worth individuals. Today, anyone with money to spare can trade a variety of financial instruments. None of this means profits are guaranteed. Trading via any medium carries a certain amount of risk. However, more people now have the option to take the risk, if they want.
Digital technology has opened up the retail trading sector. Institutional investors, financial professionals, and wealthy individuals no longer have a monopoly on the industry. Anyone with a computer or smartphone can create an online trading account in minutes.
As long as they’re in a region where local laws permit the buying and selling of financial instruments online, everything can be done in just a few clicks. That’s why the industry is set to become a $12 billion behemoth in the coming years and why online trading companies are becoming a larger part of the financial industry in general.