Online brokerage houses

A report in 1996 stated that investors had opened 1.5 million online accounts, about twice as many as analysts had projected just two years before, and it was estimated that by 2001, the number of online accounts will soar to 10 million. The primary reason for this increase was price. If an investor buys 500 shares of a $50 stock, he or she pays about $425 in commissions at a fullservice broker, or about $155 at a discount broker. By making the same trade electronically with a discount broker through a direct dialup connection, and the investor pays only about $35. If the investor is willing to go through a World Wide Web site, the cost can be as little as $12. Another reason for the increase is convenience. If the investor uses a fullservice broker, he or she usually must call during office hours to make a trade. With online trading, the investor can check his or her holdings and enter an order any time of day or night. When the investor's instructions have been executed by the broker's computer, the investor gets an e