The practice of buying and selling shares online has been growing in popularity in recent years, as the internet increasingly becomes the place in which we conduct our day-to-day business. Follow our guide to getting started.

According to What Investment, three out of four share-traders were choosing to manage their accounts online in October of last year and Observer figures reveal that some 1.5 million share deals were made online during the first quarter of 2006.

Online share trading is almost always undertaken on an execution-only basis - without advice or intervention from a stock broker - as opposed to discretionary and advisory broker services.

Initially just a way of instructing stockbrokers to make deals without having to pick up the telephone, traders can now make their own trades via a web page that displays real-time share prices on screen.

The advantages offered by the freedom, independence and immediacy of share-trading online are obvious - but the natural drawback of 'DIY' execution-only transactions is the absence of professional advice and support in making share decisions.

Brokers

Although execution-only nature of online share dealing means that individuals make buy and sell decisions independently of a stock-broker, transactions are still conducted via a broker's website. As such, factors such as the scope they offer for alternative investments outside the main UK market and the notice period for gaining access to certificates should be taken into consideration.

Equipment

In theory, prospective online share dealers need only plug their PC into an internet connection to get started. But it is also worth checking what browser and operating system you have and whether your selected broker's system is compatible, and it is essential that security measures are as comprehensive and up-to-date as possible. Brokers implement encryption measures such as passwords, so keep them safe and to yourself! It is also advisable to upgrade applications and the broadband connection to reduce the risk of disrupting a deal with slow computer functions or transferral speeds.

Cost

Because online share dealing is execution-only and therefore requires little input from the chosen broker, it can be an affordable method through which to invest. UK share purchases are subject to stamp duty at 0.5 per cent, but online trades tend to cost a flat-fee regardless of the size of the deal, sometimes in conjunction with a monthly charge. However, going online could end up being a false economy if inexperience and over-eagerness leads to a bad deal so exercise caution regardless of how large or small the transaction.

The internet has opened up too many avenues to count when it comes to having access and information to previously expensive practices out of everyday reach and nowhere more so than in money management. The pace and profits of share dealing can now be enjoyed at the click of a mouse - just remember that the virtual trading floor deals in real, your, money.

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