When trading shares online, it’s important to give serious consideration to the security implications involved. Not only should you know what your broker is doing to keep your money safe, but there are also a number of things you can do at your end.
Broker web sites typically employ an encryption standard so that when you log in, any data transferred between your computer and the broker is secure, and cannot be viewed by anyone else. This is crucial to your online safety, as information such as passwords and personal details should never be revealed to another person.
It is true that in the world of online trading, there are occasional security glitches. But should anything happen that is the fault of the broker, you should be protected. Having said that, the majority of security lapses are caused by the user, not the broker. Consider the following.
Username and password
Your logon and password should never be revealed to anyone else. If you are logged in, don’t walk away from the computer where others could potentially gain access. Passwords should preferably be a combination of letters and number, the longer the better.
It’s important to keep records of everything you do, and ensure you have backup systems in place to prevent data loss in case of fire, equipment failure, theft or other events. If possible, keep copies of records in two separate, secure, physical locations.
When trading shares online, you run the risk of your internet connection dropping out, or worse still, your computer failing at a critical moment. This could lose you money, so it′s important to have a backup system available, even if it is only the telephone number of your broker. Preferably your broker will have the same abilities over the phone as they make available to you online, so a computer malfunction is not necessarily going to interrupt your trading.
Check that your broker has insurance protection so that if anything disastrous ever does happen, they are covered, and hopefully you will be too.
From the 28th November 2008, deposits up to $1 million with any authorized deposit-taking institution are guaranteed by the Federal Government free of charge. You can check the list of ADIs on the APRA web site.
The Federal Government also offers a further guarantee for balances greater than $1 million, if you pay the Government fee equal to 0.7% per annum of the portion of your deposits exceeding $1 million.
Taking the above precautions seriously may help keep you safe when trading online. It′s your money, so it′s your responsibility to do your part.