Advantages And Disadvantages Of Floor Trading

With the ascendency of new algorithmic trading firms with their cutting-edge, technology-driven trading strategies with the goal of earning profits in billions of dollars, HFT has become the wonder-strategy for low-investment, high-profit trading opportunities. Today, nearly seventy-three percent of US equity market's transactions run on HFT ensuring high-liquidity and

In 1996, the Indian parliament passed the Derivatives act, which allowed online transaction of shares, thus making it much easier for all stakeholders to perform their task. Online trading, in simple terms, can be understood as buying and selling securities through the internet. Such trading commonly necessitates an online trading platform offered for order initiation and completion. This trading platform provides the investor with all the trading information necessary to make informed investment decision at any point of time. Securities trading can be done with a click of a few buttons and the investor has access to live market watch functionalities and intraday research dashboard with quick login.

IntroductionThe trading of company stock to the public has been going on for many, many years. Over the years the supply chain for buying and selling equity stock has changed with innovations in technology. Today, the old brick and mortar environment of equity trading is being replaced by virtual trading through websites like Ameritrade, E-Trade, and Trade Station.

According to Zaloom (2003), “Information technologies underpin traders’ daily practices of economic judgment by shaping the available informational resources” Yet, the transition from tradition face-to-face to electronic trading system continues at an extremely rapid rate. Accepting the change is vital but what is more is that we deeply understand benefits and fully aware of drawbacks of this shifts away. The first part of the essay highlights on the advantages of the electronic trading platform, while the second focus potential disadvantages. The evaluation is based primarily on four key premises: market accountability, price efficiency, information transparency and users’ experiences.

Market Maker: intermediary for stocks traded, and for off-hours trading in stocks. When you trade stocks, you

I. Securities Markets A) Types of Securities Markets 1. The Primary Market a. Going Public: The IPO Process b. The Investment Banker’s Role 2. Secondary Markets B) Organized Securities Exchanges 1. The New York Stock Exchange a. Trading Activity b. Listing Policies 2. The American Stock Exchange 3. Regional Stock Exchanges 4. Options Exchanges 5. Futures Exchanges C) The Over-the-Counter Market 1. New Issues and Secondary Distributions 2. The Role of Dealers 3. Nasdaq 4. Alternative Trading Systems D) General Market Conditions: Bull or Bear Concepts in Review II. Globalization of Securities Markets A) Growing Importance of International Markets B) International Investment

In stock markets and public exchanges around the world there are ongoing underground trading systems. These systems are a marketplace for electronic investors to provide liquidity. When utilizing the ways of purchasing and selling stocks frequently, multiple facets of these exchanges expose different ways that price discovery will be affected. These underground markets are called Dark Pools. The speed and rate at which trading is possible within dark pool markets are far beyond what past models of trading were composed of. New programs and models allow traders to become leaders by devising new ways to compete in the market for completing orders. Traders devise algorithmic robots that utilize artificial intelligence. These amplified tools of trading are utilized in a way that impacts trading capabilities and price discovery by the average investor. By analyzing the functionality and techniques used in trading within Dark Pools an understanding will be gained of how dark pools disparately impact and affect price discovery.

In today’s technology driven society, information systems are changing the financial markets. Modern day electronic trading has given direct market access to retail traders and investors. Stock trading used to require face to face trading or calling your broker over the phone. The market was illiquid in lots of areas such as options, short selling, and smaller cap stocks. The transaction costs were also costly. Improvements to electronic trading brought the market faster order executions, liquidity due to the increase in trades and frequency of trades, reduction of transaction costs, more competition, smaller bid-ask spreads, and easier accessibility. Advancements in information systems leveled the playing field whereas most trader and investors can now received data and news at the approximately the same time. It also made possible for the average retail trader or investor to trade from home or even on the go on a mobile device. There are many electronic information systems that have improved electronic trading and have opened the stock market to new possibilities. This research paper will examine some of the information systems that have given us the modern day electronic trading in financial markets and the highly debated high frequency trading (HFT).

3. Leverage- In layman's terms, this feature allows the trader to trade more money than the amount present in trader's account. This gives the trader a chance at getting hands on huge profits by investing a small amount. In most cases, the trader gets to choose their own leverage. Leverage is a ratio. Let's say that you have $500 to invest in your account and that you are entering into a trade with a leverage ratio of 50:1. This means that for every $1 you can trade for up to $50. Now for as little as $500, leverage gives you the power to trade up to $25000.

A typical mistake made by brokers in the remote trade money markets is to attempt to effectively focus on the tops and bottoms in the market before they are unmistakably framed. This methodology has crushed

Modernized convenient platforms for financial instrument trading are one of the great contributors. In general, there are two types of “places” for financial instrument trading. One is trading on an exchange and another is trading over the counter (OTC). When trading in an exchange, certain rules and regulations are implemented in order to facilitate the trading process and to protect the interests of all the involved parties in the trading. When the buyer and the seller reach agreement which the bid and the ask price are equal, the transaction will be executed and the agreed price will be communicated throughout the market. Once two parties agree at a matching price, the trade can be executed no

Share markets audit and progressively monitor integrity of stock brokers, companies listed, members and clients. In order to put in place a safeguard that protects investors that participate in unruly trade practice.

Currently, trading comes in by way of electronic pulses, where capital is unbridled in hollow spaces, and crammed into computers that are processing at high speeds and cooled with huge air. And today, humans are being taken out of this game, as an alternative, proprietary fund manager, trustees, brokers, investment banks, and traders place all the trust under complex algorithms bossed by computers, with less or limited human involvement in its functioning.

Stock market is a trading platform which provides an opportunity to buyers and sellers of securities to do transactions. As of now there are 23 recognised stock exchanges in India and 24th is likely to get functional soon. However the majority of transactions in securities happen only on the National Stock Exchange. The Bombay stock Exchange is the second largest contributor in the overall pie of total transactions. However it 's contribution is

Although some believe that insider trading makes the market unfair, it actually makes stock prices reflect their true values, which is beneficial to the overall economy. If insiders are allowed to trade freely based on all the information that is available to them, stock prices will quickly reflect their true values as that value changes. Instead of a stock dramatically spiking up or down on the day that information is made public,