There is a wide range of online bond trading platforms that came up in recent years so it can be hard to find the best one for you. One of the best online bond trading platform can prove a worthwhile decision as choosing an inappropriate platform will lead to spending more time, money & frustrations. When it comes to finding an online bond trading platform, the following are five mistakes that you need not make. You will know what they are and you can stop doing them, to help you make the most appropriate decision for your investment personality.
- Overlooking Fees and Commissions
The most serious mistake that one can make in choosing the online bond trading platform is to pay little attention to the fees and commissions that the selected platform will be charging. This includes overlook fees for the trades, account maintenance fees, data fees, research tools, and any other fees. Each platform has its own cost model and often to determine which site has the best value, one has to compare several platforms at once. Be very cautious with commissions per trade because frequent traders will end up paying a lot of money to their brokers through such a regime.
- Not Evaluating the Range and Volume of Available Bonds
Yet another error that one is likely to make while choosing an online bond trading site is not evaluating the range of bonds as well as the number and turnover of bonds available. For that reason not all of the platforms are the same – some of them offer only a limited selection of bonds, such as government or municipal or corporate bonds.
But also within the platforms that do offer a variety of bonds, the actual volume that one can trade specific bonds could significantly differ. It helps you guarantee that at the platform you selected, you would have enough constant flow of the exact bond types you will actively trade in. If for instance you have specific interests in high yield bonds, investment grade bonds or any other specific type of bonds that suit your strategy then a platform that has limited inventory in the respective area of specialty will affect your trading.
- Insufficient Testing of Tools and Trading Capabilities
You also do not want to make the mistake of signing up with an online bond trading platform only to realize that the platform does not have sufficient testing of the various tools, analytical and trading capabilities that you will need. This includes, but is not limited to, simple price graphs, unique bond rating systems, filters, risk assessment tools, trading strategies, news and notification sources and delivery, saved state and settings, mobile interfaces and services, and many others.
Determine if the platform has enough tools that fits your personal trading strategies, whether it is conducting long term research on stocks to invest or analyzing stocks throughout the day. Some demo trading accounts you would like to have screenshots from them for comparison of trends and features of other trading platforms.
Ensure that the data visualizations, analytics and trading models meet your requirements in terms of depth of solution and specific functionality. Check if the platform uses outside data feeds that might affect your trading action such as economic figures, issuer information, and reports. Use the types of orders permitted to your advantage and specify whether the speed, reliability, and approach of work correspond to your expectations.
- Neglecting Cyber Risk Controls and Operational Resilience
In an environment where the use of the internet is on the rise and also experiencing higher cyber-related risks, you also cannot allow yourself to select an online bond trading platform without having to consider cyber risk controls and operational resilience policies. Unfortunately, this is an area that many investors neglect when they are assessing the trading platform with regards to its functionality only.
Issues such as weak websites and mobile trading app security, weak data encryption, weak session management, and lack of employee cybersphere training are some of the cyber hazards that should draw concern when evaluating platforms. Any platform is vulnerable to cyber attacks and technical issues, but the careful schedule of operations, response measures, and backup procedures set apart truly reliable providers.
Consider breaches, previous and current downtime episodes, clear reporting of incidents, and ways to improve platform–level security mechanisms progressively. When deciding on the potential platform, one should investigate existing disclosures or requests concerning any weakness, data breach, phishing, or other cyber attack or attempt.
- Failing to Compare Customer Service and Support
The last big blunder when choosing your internet bond trading provider is not to compare their customer services and experience. However, it is almost inevitable that regardless of how well a publisher is on-boarded onto your preferred platform, they will at some point ask questions or have some problems which will necessitate some level of customer support.
Still, there will be a time when you will require a call for technical help, assistance with using a particular platform, understanding certain transactions or many other typical questions. Essentially this means that in decision making between similar products it may be advisable to prioritize the evaluation of the support channels available, the availability of the support, and the response time and the depth of support that the customer gets when using a particular platform.
Check support sites for scope of help topics within the site, help via integrated search, and help through icons/banners/links for phone and email live support and social networks. Try to avoid direct questions about basic support by verifying the availability of necessary training materials in multiple languages. Research and gather online third party reviews and feedback that reflects on the sentiments that customers hold concerning the provider support experience.
Conclusion
It becomes clear that it is critical to avoid the primary errors when selecting your online bond trading platform in order to generate the largest possible profit while incurring the smallest amount of additional costs and complications. Lack of adequate research on fees or missing essential tools relevant to your trading approach are costly factors that impair results.
