Deciding on an online share trading platform in South Africa is quite a daunting task as there are many platforms to choose from. JSE senior manager of market development Nicola Comninos says that it’s important that you consider all the following when considering share trading in South Africa.
For beginner traders, EasyEquities has an option whereby you let professionals handle your Share Trading which is tailored to specific risk profiles, including aggressive, balanced, moderate and conservative.
Most online share trading platforms provide access to a limited range of instruments. For example, you may not be able to trade derivatives or, if you can, you may be charged an additional fee for doing so. Although, a limited range of products makes sense when you are starting out, or have limited means. If you want to invest directly on the JSE but have less than R5 000 to invest on a regular basis, you should consider starting with FNB Share Trading, with its minimum monthly investment of R300, or Standard Bank Share Trading which allows monthly investments of R500 or more.
Even though costs are an important factor in your choice of online stockbroker, it is equally important that you have access to the services you require. If you are an investor with little knowledge, you may be better off using a full-service stockbroker, with an online platform as a back-up that enables you to check on your investments daily or regularly and improve your knowledge. Online stockbrokers may look cheaper on paper, but full-service costs can be negotiated.
You should take into account the facilities offered to manage your portfolio. Discretionary or non-discretionary. These are the two main divisions in the level of service that you can receive from a stockbroker. Non-discretionary trading is where you are responsible for making trading decisions. You are still able to call your broker and ask for his or her opinion, for which you will probably pay a fee. A discretionary trading account is where you give your stockbroker or another person or institution the authority to buy and sell securities on your behalf, at their discretion, or subject to pre-set restrictions. For example, you may permit only investments in listed equities or limit the number of trades a month.