What is an Online Broker? Online Trading Explained

Welcome to our guide that answers the question of ‘What is an online broker?’ Keep reading to see why we, at CAPEX, are exactly what you should be looking for in an online broker!

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A great example of an online broker

Do you want to know what an online broker is? Just take a look at what we, at CAPEX, have to offer. This features a user-friendly website that you can use to execute trades on thousands of assets.

There are also iOS and Android apps available so that you can buy or sell from the convenience of a smartphone or tablet. Like all good online brokers, we feature assets ranging from commodities to cryptocurrencies. All of which means that you can look forward to a legal, safe and easy way to manage your investments.

Safety first when picking an online broker

If you’re asking the question of ‘What is an online broker?’ then the chances are that you won’t know what safety features to look for in an online broker site. You should only ever use an online broker that is fully authorised by a  financial authority.

For example, we, at CAPEX, are regulated by the Cyprus Securities and Exchange Commission, the Financial Sector Conduct Authority in South Africa, the ADGM Financial Services Regulatory Authority in the United Arab Emirates and the Seychelles Financial Services Authority. Plus a good online broker will always host a variety of security systems to make sure that your personal data and funds stay safe.

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What is an online broker?

Simply put, the online broker definition is a company who has a website or app that allows you to experience  online trading of stocks, commodities, CFDs or any other asset. This means that you could go to an online broker website and buy something like stocks in a big tech company like Apple. Or you could use an online broker app and trade forex assets like US dollars for euros. Before the internet came along, you’d have to buy and sell assets over the phone. But now online brokers like CAPEX give you a chance to execute trades from the palm of your hand.

The basic function of an online broker

The basic online broker meaning is an intermediary who lets you buy and sell financial assets over the internet. You will be able to use an online broker either via its website or through an app. This means that you can look forward to doing things like buying stocks from your smartphone, selling commodities via a tablet or even trading bonds from a laptop. In short, everything that you would have been able to do from a standard broker, you can now do in the online domain. At CAPEX, we give you a simple, safe and fun way to do all of these things.

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Why you should use an online broker?

Now that we’ve answered the question of ‘What is an online broker?’, we’ll need to examine why you should want to use an online broker in the first place. The simple truth is that you will be using an online broker to make flexible investments that you hope will grow over time. By going online, you’ll be able to make trades 24/7, depending on the market, anywhere with an internet connection. Plus the personal bias will be taken out of the equation which is something that might not be true at a traditional broker.

Assets available at an online broker site

The range of assets featured at an online broker will vary dramatically. They tend to include currencies, stocks, commodities and bonds. You might also be able to speculate on indices, ETFs and blended funds. This shows that being in the online domain doesn’t limit what kinds of assets you can trade, and you’ll get the advantage of a service that’s open 24/7 unlike the standard broker.  We have also witnessed a huge rise in the popularity of cryptocurrencies at online broker sites. This means that you can come to our CAPEX online broker platform and look forward to trading a massive number of cryptocurrencies like Bitcoin and so much more.

How does an online broker operate?

When answering the question of ‘What is an online broker?’, it’s important to note that different brokers work in different ways. Most will allow you to place your order and then this order will be put through to different buyers and sellers on markets such as stock exchanges. This allows you to agree to the terms of the sale of an asset and complete the trade.

While this has been the traditional method of trading, we, at CAPEX, give you an easier way to access the market. This comes through the CFD model where you don’t actually have to go through the process of buying or selling the asset. Instead, you’ll be able to benefit from the value changes of anything from cryptos to stocks via the CFDs that you hold. A great way to enjoy safe, easy and flexible online trading.

Trade CFDs at an online broker

A growing number of brokers like us, at CAPEX, now let you trade contracts for difference (CFD). This means that you don’t actually buy the asset, but trade on its value. CFDs are hugely popular and they give you a safe way to benefit from the rise or fall in the value of assets including anything from stocks and commodities to cryptocurrencies and ETFs. You can look forward to being able to buy CFDs for anything from big tech stocks to cryptocurrencies like Bitcoin right here at our CAPEX online broker site.

How to use an online broker’s site?

We can’t just give you an answer to the question of ‘What is an online broker?’ without showing you how to use these sites. Let’s look at how you use our CAPEX.com site Here you just have to hit the register button to create your account. This means supplying your email, creating a password, and then verifying your account by submitting some more personal details. From here you will be able to make a deposit with a variety of payment methods that include a bank transfer, alongside payment providers such as Visa, MasterCard, Neteller and Skrill.

Start trading

Now you can start trading. You’ll get the choice of either using our CAPEX WebTrader platform or the MetaTrader 5 platform. Both of which are packed with analytical tools and financial instruments to guide you through the market. You should take time to browse the markets for the hundreds of different assets and check the recent market fluctuations of each. Once you’ve done this, you can simply click on the asset, enter the trading volume, and the CFD will be added to your account. This is just one example, but it’s a similar approach to what you should expect from all good online brokers.

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Are there any fees for using an online broker?

It’s fair to say that all online brokers will include some fees or costs for their trading. After all, if you know the answer to the question of ‘What is an online broker?’ you’ll know that these are legit businesses and they will have to make money to operate. You will want to make sure that you are using the broker with lowest commission rates.

We at CAPEX keep all fees to a minimum and below the industry rate. Rather than hitting you with heavy commission fees like some brokers, you’ll find that any fees are kept in the spread. This is the difference between the selling price and the buying price of the CFDs. Such fees along with minor costs for things like overnight swap and account inactivity will always be made clear so that you can factor them into your investments.


Different types of online broker

You should think carefully about which kind of online broker you use. There are full service brokers who will give you a wealth of advice and insight about anything from your investments to planning your retirement. Bear in mind that the fees at such full-service brokers can be fairly high. Such fees are why some investors choose discount brokers instead. These focus purely on trading, and with the likes of so-called robo-advisors, it seems that there are many ways that people try and enjoy cost effective trading.

Consider a CFD broker

Such reasons as why we, at CAPEX, have long been considered to be the best CFD trading platform as a result of the speed with which you can trade on the value of a massive number of assets. This means that you can simply enjoy buying and selling assets without having to pay for a range of services that you’ll rarely need. However, we also feature enough webinars and educational tools to make sure that you take your online trading to the next level.




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Picking your perfect online broker

In answering the question of ‘What is an online broker?’, we can see that there are brokers for all kinds of investors. But we, at CAPEX, are a great choice for anyone who is just getting started in online trading. This is because you can get started with a minimum account balance of just $100 that’s much lower than many rival brands. Plus you can enjoy trading CFDs in excess of 2,100 assets.

All of this is packaged in a user-friendly site that is fully regulated, and contains market-beating fees on everything from the spread to account inactivity. This means that you can simply sign up and either use our CAPEX WebTrader or MetaTrader 5 software to execute your trades. The CFD model used here means that you won’t have to worry about actually owning the assets, but can benefit from the rise or fall in its value.

Conclusion – Get started with a great online broker

By now you’ll have a good understanding of how brokers work, so that you won’t have to ask ‘What is an online broker?’ anymore. By looking at how we function, you can see that an online broker simply gives you a way to buy and sell a range of financial assets. The online broker merely acts as an intermediary between yourself and the market.

We’ve shown that there are lots of different kinds of online brokers out there. Some of these offer a fairly complex and involving service that comes with a fair amount of commission fees. But if you want a legal, safe and easy way to trade, then you’ll want to use an online broker like us at CAPEX. So sign up to CAPEX and start trading!

What Is An Online Broker – FAQ

🤔What is a broker?
🤷 What are some good examples of online brokers?
👌What is the brokerage meaning?
👀What types of brokers are there?
✅How can I trust a broker website?