VPNs Aren't Just for Corporate-Based Traders Anymore

If you've worked for a big company any time recently, and wanted to connect to the company's computer system from home, you probably had to make that connection via a VPN (Virtual Private Network). If you thought the purpose of the VPN was to make the company's network extra-secure, you'd be right. But if you thought VPNs were just for big companies, you'd be wrong. VPNs are now offered as a paid service to anyone needing the extra level of security they provide. As a trader, this could be you. Especially if you would like to be able to trade securely while sipping your morning latte at Starbucks. In this post, I'll give you a high-level overview of what VPNs are all about, and why they could be important to your trading business. Plus I've linked to a few articles that will give you even more information in case you decide you need to get on the VPN bandwagon.

What is a VPN?

The purpose of a Virtual Private Network is to keep information about your computer and your online activity safe from others in the online world. At the most basic level, a VPN routes your data through an extra server to shield you from exposing your IP address and other information to the Internet directly. And, more importantly, it encrypts all your data as it's leaving your computer.

VPNs: Under the Hood

In order to understand how a VPN works, let’s first look at how communication channels work without a VPN. When you connect to a website from your trading computer, a channel is established between your trading computer and the website. All information is exchanged through this two-way channel. The problem is, this channel is visible to everyone on the Internet. So anyone with malicious intent can look at your data. Modern websites use SSL (Secure Sockets Layer) to keep data hidden. (These are websites whose addresses begin with HTTPS). But, if the site only uses HTTP (indicating no SSL certificate is available), then anyone can see the raw data you are sending. However, in the case of HTTPS, even if cyber hackers cannot decipher the data itself, they can still observe the time and location of your connections. If you are connecting to sensitive websites like banks or trading applications, this time and location information can be used to infer various things about your usage patterns. VPN solves this problem through first connecting you to a VPN server via an app. The app encrypts all your data before it even leaves your computer (i.e., before it gets to your Internet Service Provider – or to Starbucks' ISP). From there, the VPN server connects to the web on your behalf. As a result, hackers or cybercriminals can no longer (easily) identify you as the traffic origin. Plus the VPN encryption provides better security for your sensitive data. Even if they manage to look at what you're sending, they only see the encrypted version, and not your actual data.

VPNs: Anonymity and Legality

VPN does NOT provide full anonymity. VPN service providers still can log your information. VPN providers have to comply with local laws. Because it is a relatively new technology, the laws aren’t clear cut. Always assume if government agencies want to access your VPN data, they might be able to do it through legal channels. But VPN still provides a higher level of security. For example, without a VPN, when you connect to a website, the ISP can see the connections. They can monitor your activity and even slow down your speed based on what website you are connecting to. A VPN encrypts both the data and the destination. So your information is more secure from the prying eyes of ISPs. Note that some countries (e.g., China, United Arab Emirates, Russia, Turkey, and Iran) don't allow VPN use. So when traveling with your trading laptop, make sure you check the local laws of your destination countries before using VPN.

VPN Services: Free vs Paid

VPN requires expensive infrastructure setups. So if a VPN service is free, make sure the provider is not selling your information to third parties or serving you targeted advertisements. Look at the fine print before using any free services. Most paid services have a vested interest in keeping your data secure and not using it for any other purpose. Their reputation depends on it. Nevertheless, always read the fine print to make sure there aren't any hidden surprises. Paid VPN services are quite affordable. Generally, you can expect to pay single-digit monthly subscription fees, with good discounts for annual subscriptions.

Adding a VPN to Your Trading Computer

VPN services are quite easy to use. Once you subscribe to a particular service, you’ll need to download and install their app. Launch the VPN app before you open any web browser or email service. The app will establish a connection with the VPN server. At that point, you can browse the web or check emails from your trading computer securely.

Conclusion

If you are at all concerned with the security of your trading computer information or trading data, it's time to check out your options and get signed up with a VPN provider. Start looking now to see what makes sense for your trading business. There are more trading computer tips like this in our buyer's guide. Check out our "How To Buy a Trading Computer" e-book. We hope today's Quick Tip helped you. If you found this helpful, you'll want to check out the other computer How-To's I've created on this page. You can always call us if you have questions: 800-387-5250. Photo by Brooke Cagle on Unsplash.