With modern mass communications technology, everything seems to have changed, from the way we call in sick to the way we make life changing decisions. With modern mass communications facilitating everything from the nickel and dime sale of individual songs to brokering massive deals that shake entire industries, the rules have changed with the advent of the internet and similar technologies on the public market. One particular way mass communications technology leaps have altered the world financial system is through the process of trading online, also know as investing online. This process is fairly simple, yet a mere twenty five years ago it was unthinkable.
What's Trading Online All About
Trading online is the process of investors and traders buying and selling securities over an electronic network, typically a network hosted by a brokerage firm. Where once the process was a system where by stock orders were sent over telephones from investor to stock broker to trading floor, now the process is facilitated with specialized software adopted by most major stock exchanges. The advent of software of this type began with K. Aufhauser & Company (which was later acquired by the online brokerage firm TD Ameritrade) and a program called “WealthWEB” in August 1994. The service took off in the late 1990s, with competing firms and programs flooding the market. With the temporary economic boom bubble of the era, millions began to buy and sell stocks online and trading online was the wave of the future.
The advantages of online trading are fairly significant. Orders for stock buying and selling can be entered directly into electronic communications networks, which can also facilitate private trades with other investors. Some buy and sell orders entered online still go through a stock broker, allowing brokerage firms to approve and monitor trades, with the intent of protecting clients and firm alike from illegal or wrong traders that could make an impact on the client's investment portfolio or the firm's license to practice their business.
Can't Do It Without Brokers
In the United States, most of these online brokers are referred to as discount brokers, seen as a way for less than wealthy people to try and invest in a still volatile stock market. In Europe and Asia, less than wealthy investors do use these services, but “online brokers” also work with individual investors with high net worth. The popularity online brokers is mostly a matter of the speed and ease of entering orders compared to traditional brokerage firms and a lowered amount of fees and commissions.
These processes are made possible by platforms for trading online as they that act as a digital hub, through which investors are able to buy and sell securities ranging from equities and stocks, stock options, fixed income and mutual funds. These programs also include functions that track and monitor the client's securities and investment portfolio and indices. Most programs also include research tools to assist in decision making, as well as real time streaming stock quotes and financial news updates of interest to the individual investor and their specific portfolio.