What is Internet trading?
As the description indicates, this is trading on the financial markets over the internet by means of a system for carrying out transactions with the help of a particular internet-based programme; it has very recently become the most prevalent way of working. The majority of stock exchange centres are shifting from the usual model of selling on the “trading floor” or in the “hall” (at which the traders are physically in the stock exchange or have to be active by means of a broker who is situated there) to electronic trade. This crossover means that any interested party can purchase every asset listed on the exchange immediately from his trade terminal by placing an appropriate order online, and this is quite simply internet trading.
NASDAQ, founded in 1971, was the first exchange globally where business was carried out with the help of electronic trading. The NYSE, the largest exchange, will need 35 more years to automise trading but now the process is closed and this means the decline of “floor-trading”.
Today all large capital investment companies choose electronic trading. This also means that the traders and brokers active on the “trading floor” are excluded from trading. The traders themselves analyse the market and carry out the buying or selling of capital goods they are interested in.
There are many strong arguments in favour of electronic trading: low transaction costs, excellent liquidity, transparent interaction and tight spreads.
It is becoming clear today that electronic trade represents a new era in the arena of stock investment; it is a fledgling course showing dynamic development and a thing of the future.