Equities
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PDF versionTo "trade" means to buy and sell in the jargon of the financial markets. How a system that can accommodate one billion shares trading in a single day works is a mystery to most people. No doubt, our financial markets are marvels of technological efficiency. Yet, they still must handle your order for 100 shares of “X” with the same care and documentation as of 100,000 shares of “Y”.
You don’t need to know all of the technical details of how you buy and sell stocks; however it is important to have a basic understanding of how the markets work.
Electronic Trading
In this fast moving world, some are wondering how long a human-based system like the NYSE (New York Stock Exchange) can continue to provide the level of service necessary. The NYSE handles a small percentage of its volume electronically, while the rival NASDAQ is completely electronic.
The electronic markets use vast computer networks to match buyers and sellers, rather than human brokers. While this system lacks the romantic and exciting images of the NYSE floor, it is efficient and fast. Many large institutional traders, such as pension funds, mutual funds, and so forth, prefer this method of trading.
For the individual investor, you frequently can get almost instant confirmations on your trades, if that is important to you. It also facilitates further control of online investing by putting you one step closer to the market.
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