3. Best online stock brokers

What Are the Risks of Online Trading Platforms?

Unfortunately, there are several risks involved when you trade stocks online, just as is the case anytime you engage in any internet-related activity. Some of the more common ones include:

  1. Identity theft. What’s not always fully appreciated is the degree to which identity theft is an inside job. It makes perfect sense. People inside an organization have access to your information. When you trade stocks online, the potential is real for an insider to compromise one of your most valuable asset accounts.
  2. Computer viruses and malware. Often the main purpose of viruses and malware is to install spyware on your computer. Thieves can use this to gain access to your passcodes and other information. One way they do this is by installing spyware that enables them to engage in keylogging. This allows thieves to track your keystrokes, giving them access to valuable information.
  3. Data breaches. There were a record 1,862 data breaches in 2021. That represents an increase of 68% over 2020. To make matters worse, major financial institutions are a treasure trove of valuable information which makes them a gold mine for cyber hackers.
  4. Phishing schemes. Thieves have become adept at duplicating official-looking documentation from different financial institutions. In fact, they can copy a webpage or email with exact precision. You can receive a convincing-looking email from what looks like your online broker. But it’s really just a copy, directing you to log into your account by clicking a link. But the link doesn’t go to your online broker. It goes to a duplicate webpage that’s designed to collect your passcodes. Your real account then becomes immediately vulnerable.

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