Electronic Trading Pros & Cons
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Electronic exchanges that permit trading have proliferated on the Internet and World Wide Web. E*Trade, Ameritrade, Datek Online and other electronic exchanges offer investors the ability to invest their money electronically in stocks, bonds, commodities, and futures. The electronic revolution in shareholding and investing has already allowed layman and professional investors to make inexpensive, speedy trades day or night. In addition, these electronic exchanges offer to potential investors the same inside information available to professionals. Yet, despite stories of overnight success where hundreds of dollars have been turned into hundreds of thousands of dollars, there are many risks and pitfalls that await the unwary investor who is new to electronic trading. For example, many investors may be surprised to discover that getting the cheapest commission does not guarantee them the cheapest trade or that how their order is traded after they invest can significantly effect price. As Barbara Roper of the Consumer Federation of America warns “The typical investor doesn’t have a clue that he may be losing money based on how his trade is executed” (Smith 1).This analysis will look at the growing phenomenon of electronic trading via the Internet and Web, including the advantages and disadvantages of electronic trading for potential investors. A conclusion will address the possible direction electronic trading will take in
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T, or two-and-a-half hours more access to these shares than Wall Street’s Big Board 4:00pm close (Egan 1). Many online trading brokerages have recently updated and expanded their services in order to provide individual investors with greater access and convenience when trading online. MB Trading, for example, a direct access online broker, has recently extended its trading hours from 8am-8pm EST and implemented a fully-staffed trading desk where consumers can elicit help and assistance from a real human being. “We don’t have a voicemail system—and we never will,” says MB Trading co-founder Ross Ditlove. “Whether it’s a software question, or a question for a broker, the person that answers the phone will be able to help you” (Ready 2).
Online or electronic trading offers many advantages over open outcry trading, including extended hours of trading, easier access to trade and account information, and the ability to track one’s account from anywhere in the world at any time of the day or night. One of the other biggest advantages of online trading is the fact that it eliminates the broker thereby saving the investor a cut of the trade that normally accrues to the broker. Online trading firms like Datek Online or Ameritrade req
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Some common words found in the essay are:
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Approximate Word count = 1692
Approximate Pages = 7 (250 words per page)
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