Joyce Tabone

PR & Marketing, Bank of Valletta

Joyce Tabone is passionate about communication. Be it through words or pictures, her key objective is that the message gets across from one point to the other. As the financial services world becomes increasingly complex, communication becomes all the more important, and Joyce is at her happiest when she’s helping to bridge the gap between the Bank and the market, using digital platforms to act as a bridge rather than a divide. Joyce works within the PR & Marketing team at Bank of Valletta.

The rise of online trading

Tuesday 26th July 2016

The world of investments and finance is in constant evolution. Although market principles remain steadfast, the sector readily responds to change and has a proven track record as an early adopter of new technology.

One of the important changes that opened up investment in shares of listed companies to the general public was the privatisation projects which enabled and encouraged ordinary people to invest in the stock market; which until then had been accessible only to the affluent.

Notwithstanding these changes, until the recent past, there was only one way to trade or invest in the stock market, and that was through physical interaction with a stockbroker. The increased use of the telephone, telex and fax machines made the communication process simpler but did not change the practice of having a middle man in order to gain access the market. The necessity of human intervention meant that transaction costs remained relatively high, particularly for the smaller investor.

Brokerage firms therefore quickly embraced the proliferation of the internet and particularly the exponential growth in the use of mobile devices. They passed on control and the relative cost savings into the hands (and pockets) of the investor. Nowadays, individuals who know how to manage their own investments no longer need to interact with a middle man – they can trade directly online.

The greatest benefit of accessing the stock market via online trading is the drastic reduction in transaction costs. Advisors and stockbroking firms, through their physical set-up and years of experience, offer a very effective way to access the markets. However it is also a costly option, particularly for smaller ticket investments. They charge brokerage fees, which are up-front charges with a relatively high minimum for their services, nominee fees when holding securities under custody and even take a percentage of any earnings on discretionary portfolios.

Online trading, on the other hand, is not free, but comparatively inexpensive and with significantly smaller minimum fees, making investments of a smaller size more viable. That said, online trading platforms do expect their users to trade frequently and in most instances fees are applied after periods of inactivity.

Undeniably, trading online for one’s self without the assistance of a market expert, does bring with it greater risk, both in way of selecting the right investment and also in the execution of the actual trades on the market. Therefore, the ‘middle man’ does pay a vital role in the chain for the small or inexperienced investor by giving appropriate advice and selecting the most suitable investment.
Selecting stock wisely, coupled with a timely entry and exit strategy, is the key to building wealth over time. The benefit of lower charges is quickly forgotten as capital is destroyed should a self-purchased speculative investment turn sour. Self-discipline is therefore very important and prospective users of such online trading platforms should make good use of the free trial periods which allow them to execute dummy trades without forking out any real cash.

Trades are executed through the simple click of a mouse or the even simpler tapping of a finger. Hence, more knowledgeable investors can really gain full control over their investment decisions. Furthermore, access to real-time data (usually at a small monthly cost) and the immediate routing of orders on the market is a benefit which is secondary to none.

Online trading platforms are great tools intended for well-informed, frequent investors and definitely not merely an innovative cheap route to the markets for those aspiring to ‘get rich quick’. In essence, it helps, for good or bad, take control of the market investment decisions from the brokers and puts it into the hands of investors.

Last December, Bank of Valletta launched eTrader+ Powered by Saxo Bank. This new online trading platform is the result of a collaborative agreement reached between the two banks. The platform enables the Bank to offer an alternative channel to active traders who want direct access to trade online. In fact, this highly adaptive platform offers key benefits such as the ability to place orders in real time across all major international markets, the possibility of effecting single limit as well as algorithmic or advanced orders and having 24-hour access to market prices for more than 30,000 securities.”

The eTrader+ powered by Saxo Bank is intended for the seasoned investor who trades frequently, providing a truly personalised and fully scalable platform that is accessible seamlessly, with all functionality being carried across devices, including tablet and mobile phones (iOS, Android and Windows compatible phones).

This platform demonstrates Bank of Valletta’s commitment to utilise technology to meet its clients’ financial needs. As a fully-fledged financial services provider, Bank of Valletta is doing its utmost to be the leader in its market, offering a comprehensive suite of financial solutions that compete not only with similar players, but also with providers of specialised services in investments and wealth management.

Bank of Valletta p.l.c. is a public limited company licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta). Registered Office: 58, Triq San Zakkarija, Il-Belt Valletta VLT 1130-Malta Registration Number: C 2833