Is it safe to trade stocks online?


Quick Answer

It is safe to trade stocks online if the consumer chooses a reputable online broker with Secure Socket Layer encryption and keeps antivirus and malware-detection programs up to date and active on his computer, according to Purch. Strength and safety of passwords is key too, says The Motley Fool.

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Is it safe to trade stocks online?
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Full Answer

It is wise to check with the United States Securities and Exchange Commission to make sure an online broker is legitimate before using it for stock trading, advises Purch. The broker should also be insured by the Securities Investor Protection Corporation, notes The Motley Fool.

It is important to make sure that the online broker uses SSL encryption with a certificate from VeriSign, DigiCert or another reputable company. This information is normally listed on the broker's website. A closed padlock icon or a key icon appearing throughout the transaction lets the user know his transaction is protected, notes The Motley Fool.

To ensure the safety and security of his transactions, it is best for the user to type the company website address into his browser instead of following an email link, which may be fraudulent, advises Purch. Keeping antivirus and antispyware software updated and active keeps thieves from accessing the user's data during transactions.

Online brokerages employ passwords and personal identification numbers for users to supply during transactions, notes The Motley Fool. Choosing strong passwords and personal identification numbers, changing them frequently, and keeping them secure are critical steps in keeping online accounts safe, according to Symantec.

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