nvestors who can simply log onto an increasing number of brokerage sites on the Internet and, for a small fee, buy and sell stocks with the click of their mouse.
By eliminating the middle-man (i.e., the stockbroker), investors have a more convenient and cost-effective method of buying and selling stocks. Industry experts estimate that approximately 35% of the trading volume taking place on the New York Stock Exchange is driven by online investors (Mattern 1). While there are anywhere from 75 to 200 trading companies offering online exchanges, most industry analysts agree that the pros of using electronic trading outweigh the cons “The advantages of online trading, which include value, convenience and speed, far outweigh the disadvantages. But some investors can get carried away with the practice and neglect to conduct adequate research before making a potentially costly transaction” (Mattern 1).
There are many distinctions that potential investors need to understand before relying too heavily on electronic trading as a source of investment. For example, there is a difference between direct access online brokers and those that are Web-based like the majority currently in operation. Many complain that Web-based brokers suffer the disadvantages of delayed trade execution, stationary account status, and f
...