Should I use a VPN while trading stocks?

by Guest Contributor

Financial transactions often contain sensitive information: account number, name, location, and other potentially compromising data. If fraudsters can get hold of this communication, there can be major consequences, and the information can be leaked to several unknown third parties without your consent. It doesn’t take much for hackers to be able to steal your identity online unless you provide adequate protection. Fortunately, there is a simple method you can use to keep your data safe from prying eyes: VPN. 

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What is a VPN? 

A VPN meaning is quite simple to understand; it is a program that allows you to create a local, private, and encrypted connection to the internet. The encryption ensures that your data is unreadable without a key. A VPN also routes your connection through the VPN provider’s server, masking your real location by giving you the VPN server’s IP address. The combination of encryption and a changed IP address makes it very difficult for outsiders to see what is going on over your internet connection. 

Public Wi-Fi connections, in particular, are highly susceptible to data leaks and unauthorized observation. You should exercise extreme caution when trading or communicating over such connections. With a VPN, you can sell shares and make other financial transactions far more securely than before, both within the four walls of your home and while you’re on the move. 

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Many are probably wondering if it is worth investing in a VPN to trade stocks more securely. The good news is that the VPN offers increased protection and privacy for all online activities – the data encryption is active as long as the program is open and includes all sent and received data on the device. 

Another advantage of a VPN is that you can change your geographical location by changing your IP address. This can be used, among other things, to bypass geo-restrictions and search for better online shopping offers. 

Last but not least, you will be harder to track. There are many third parties who are after your data for commercial purposes. A VPN obscures digital fingerprints so that the traces become generic and useless. Not even your internet provider will be able to see what you do online and won’t be able to resell your information.

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Can VPN be used while trading CFD, FX, BO, or cryptocurrency? 

You may now be convinced of the advantages of using a VPN regardless of your trading type. You will get a more secure connection and good protection against data leaks, but VPN programs will, unfortunately, eat up bandwidth. The resource usage of a VPN program will not usually be a problem. Still, for some types of stock trading where seconds can matter, even a small dent in broadband quality is potentially detrimental to the profit margin. While using the VPN, it is therefore recommended that you do not commit trades with short-term expiration. If you trade CFDs, FX or crypto, stay away from so-called “scalping” – quick trades – as a VPN can cause costly delays. 

Can I shop anonymously with VPN? 

If you trade certain instruments, there is a limit to how anonymous you can be. Many banks and/or financial institutions require KYC and AML clearance before allowing you to trade over their platforms. To get such approval, you will need to be able to prove your identity and place of residence. A VPN will still be useful in masking your activity to others, limiting the number of individuals who can observe your activities.

published by glusea

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