Online trading has gained immense popularity because of the convenience it provides to the investor and the ease with which it can be carried out. If we go back about ten to fifteen years prior to today, trading on the stock market was a thing reserved for only a few. Of course the common man could still buy stocks, but one hardly had any hands on experience in it. It was all about going through the business pages of the newspaper to mark out your preferred companies and then let your broker take over. One hardly did the trading himself.

But things began to change dramatically towards the end of the last decade. And this was made possible because of tremendous development in the communication sector, especially the internet and also a huge progress in the kind of personal computers we used. With internet coming in a big way, we could be connected to anywhere at anytime. And the trading institutions did not miss out on the potential that the internet promised. Online trading was made legal and the whole character of trading on stocks and shares changed.

Now more people are involved in trading than ever before. And the reasons are quite apparent. One does not need to leave his house to do trading. There is no paperwork to be handled. One can trade at anytime of the day, whenever he is free and feels like. And one need not bother about what his broker is offering and how much commission he is charging.

The initial days of online trading weren't that smooth though. With dial-up internet connection data transfer was slow and transactions took a long time. But all that was soon going to change. From the days of only a few kilobytes being transferred per second the internet's speed leapfrogged to a few megabytes of data transfer per second.

And this was largely possible because of the broadband technology. With optical fibers carrying huge amounts of data within seconds from one end of the world to another, online trading transactions could now be conducted in a matter of seconds. With virtually little or no time-lag online trading was now ready to take-off. And take-off it did.

But the internet also poses a few threats. Online trading has been plagued with attacks from hackers and frauds. But as the security system of the web also gets stronger by the day, these external threats can soon be a thing of the past.