However, since the internet has made the industry more accessible to retail customers, it has grown significantly. According to data available from Statistathe global e-commerce market will be worth over $12 billion by 2028.
The proliferation of online commerce is driven by technology, lowering barriers to entry. For example, a trader in the UK can buy and sell contracts for difference via their computer using leverage between 30:1 and 2:1. These terms are set by the Financial Conduct Authority (FCA) and something all licensed online business platforms must comply when operating in the UK.
A global network of traders
In the same way that someone in the UK can trade CFDs online, traders in Germany, France and elsewhere in Europe can do the same. These provisions are not limited to Europe. E-commerce has also gained ground in Asia. For example, a Thai speaker who searches on Google the phrase “วิธี ใช้ mt4 บน มือ ถือ” You will find 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 in stocks, commodities and forex.
What does it mean to be long or short? Well, if you are a newbie trader, online platforms teach you. As part of lowering barriers to entry, brokers have on-site guides that explain the basics of trading, regulations, analysis, and everything you need to get started.
Along with locally regulated trading conditions, desktop and mobile software, and trading guides, online brokers have reduced the costs associated with trading. Like many online businesses, operators rely on volume to make a profit. This means that they can charge lower fees than a broker who only works with personal clients. Online businesses also have less overhead because they don’t need office space and associated costs.
Lower costs mean lower barriers to entry
Tighter spreads (the price difference between the market price and the price you pay) means novices don’t have to risk amounts they can’t afford. Traditionally, the exchanges were reversed for wealthy individuals. Today, anyone with money to spare can trade a variety of financial instruments. None of this means that profits are guaranteed. Trading through any medium involves some risk. However, more people now have the ability to take the risk, if they choose.
Digital technology has opened up the retail sector. Institutional investors, financial professionals and wealthy individuals no longer have a monopoly on the sector. Anyone with a computer or smartphone can set up an online trading account in minutes.
As long as they are in an area where local laws allow the buying and selling of financial instruments online, everything can be done with just a few clicks. This is why the industry is set to become a $12 billion giant in the coming years and why online trading companies are becoming a bigger part of the financial industry in general.