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Inside the world of online trading with E*Trade

With the world becoming increasingly digitised, E*Trade's Stuart Sayers reveals how to trade online and why there is growing demand for this e-service.

“It’s free to join,” explains Sayers, who acts as managing director for the online trading platform. “If you’re not active [or] if you’re not trading, there’s no charge... when you trade there is a charge.”

Growing demand

The company, originally starting in the US in 1998 before being replicated in Australia, has seen growing demand as more Australians invest in shares.

“The share ownership among Australians is very strong and the take-up of online share trading has been very strong as well,” he says. “We’ve seen, since the launch in 1998, a strong move for people getting much more comfortable using online services, much more comfortable using financial online services, and that’s flowed onto [people being] much more comfortable buying shares online. So there’s a large portion of the market who are self-directed and for those clients we are a very good service.”

Of the concerns first-time customers share, Sayers says they are easily assuaged.

“I think there’s a nervousness about ‘am I going to make a mistake?’, ‘is it going to be too hard?’ and ‘am I not going to know what I need to do?’,” says Sayers. “What we find when we talk to clients is that they’re normally very pleasantly surprised at how simple it is.

“With the growth of things like internet banking and that usage growing at I think seven per cent a year, those concerns are fading every year.”

Right service for you?

While it is simple to use, Sayers warns this service isn’t for everyone.

“If people want advice, then full-service advice is where they should go, but if you’re self-directed, if you know what you’re going to do, then we’re a good option,” he says.

For those who are well-versed in the stock market, E*Trade also offers benefits other than the convenience of trading wherever, whenever.

“There’s obviously the trading itself, then there’s the tax reporting that goes around that. The tax implications of share trading can be quite complex. We try to simplify that,” explains Sayers. “There’s a free tax report for every customer – every year, once a year, a summary of your activity and tax implications.

“There are some subscription services over and above that to let you do things like ‘what if’ scenarios, so ‘what if I sold this parcel of BHP shares, what would the tax implications be?’

“The second thing is international share trading, so trading shares in overseas markets. We offer 11 of the major overseas markets.”

The option of international trading is becoming increasingly popular, says Sayers.

“In the last year, volumes in that have more than doubled. We’re seeing a big shift towards the US, I guess no surprise given where the dollar is at right now,” he says.

Sayers lists the top five US stocks traded through E*Trade as Apple, Microsoft, Google, Intel and Berkshire-Hathaway.

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Published on: Saturday, September 03, 2011

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