Online Stock Trading

Companies must meet an exchange's requirements to have their stocks and shares listed and traded there, but requirements vary by stock exchange: New York Stock Exchange:  To be listed on the New York Stock Exchange (NYSE), a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years. NASDAQ Stock Exchange:  To be listed on the NASDAQ a company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years. London Stock Exchange:  The main market of the London Stock Exchange has requirements for a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25 per cent) and sufficient working capital for at least 12 months from the date of listing. Bombay Stock Exchange:  Bombay Stock Exc...

Stock exchanges have multiple roles in the economy. This may include the following A stock exchange provides  companies  with the facility to raise  capital  for expansion through selling  shares  to the investing public. Besides the borrowing capacity provided to an individual or firm by the  banking system , in the form of  credit  or a loan, there are four common forms of capital raising used by companies and  entrepreneurs . Most of these available options might be achieved, directly or indirectly, through a stock exchange. Capital intensive  companies, particularly  high tech  companies, always need to raise high volumes of capital in their early stages. For this reason, the public market provided by the stock exchanges has been one of the most important funding sources for many capital intensive  startups . After the 1990s and early-2000s hi-tech listed companies' boom and bust in the world's major sto...

A  stock exchange  or  bourse  is an exchange where stock brokers and traders can buy and/or sell stocks (also called shares), bonds, and other securities. Stock exchanges may also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include stock issued by listed companies, unit trusts, derivatives, pooled investment products and bonds. Stock exchanges often function as "continuous auction" markets, with buyers and sellers consummating transactions at a central location, such as the floor of the exchange. To be able to trade a security on a certain stock exchange, it must be listed there. Usually, there is a central location at least for record keeping, but trade is increasingly less linked to such a physical place, as modern markets use...

The earliest stock exchanges were in France in the 12th century and in Bruges and Italy in the 13th. Presumably data about trades in those times was written down by  scribes  and traveled by  courier . In the early 19th century  Reuters  sent data by  carrier pigeons  between Germany and Belgium [1]  In London early exchanges were located near coffee houses  which may have played a part in trading. In the late 1860s, in New York, young men called “runners” carried prices between the exchange and broker’s offices, and often these prices were posted by hand on large chalk boards in the offices.Updating a chalk board was an entry point for many traders getting into financial markets and as mentioned in the book Reminiscences of a Stock Operator those updating the boards would wear fur sleeves so they wouldn't accidentally erase prices. The New York Stock Exchange is known as the "Big Board", perhaps ...

In program trading, orders are generated by a software program instead of being placed by a trader taking a decision. More recently, it is rather called algorithmic trading. It applies only to organised markets, where transactions do not depend on a negotiation with a given counterparty. A typical usage of program trading is to generate buy or sell orders on a given stock as soon as its price reaches a given threshold, upwards or downwards. A wave of stop sell orders has been largely incriminated, during the 1987 financial crises, as the main cause of acceleration of the fall in prices. However, program trading has not stopped developing, since then, particularly with the boom of ETFs, mutual funds mimicking a stock-exchange index, and with the growth of structured asset management; an ETF replicating the FTSE 100 index, for instance, sends multiples of 100 buy orders, or of as many sell orders, every day, depending on whether the fund records a net incoming or o...

A  trading room  gathers traders operating on financial markets. The trading room is also often called the front office. The terms "dealing room" and "trading floor" are also used, the latter being inspired from that of an open outcry stock exchange. As open outcry is gradually replaced by electronic trading, the trading room gets the only living place that is emblematic of the financial market. It is also the likeliest place within the financial institution where the most recent technologies are implemented before being disseminated in its other businesses. Trading rooms are also known as "trading labs" or "finance labs" in universities and business schools. Trading rooms, have become a key medium in creating a "wall street atmosphere". Before the sixties or seventies, the banks' capital market businesses were mostly split into many departments, sometimes scattered at several sites, as mar...

Algorithmic trading  is a method of executing a large order (too large to fill all at once) using automated pre-programmed trading instructions accounting for variables such as time, price, and volume to send small slices of the order (child orders) out to the market over time. They were developed so that traders do not need to constantly watch a stock and repeatedly send those slices out manually. Popular "algos" include Percentage of Volume, Pegged, VWAP, TWAP, Implementation Shortfall, Target Close. Algorithmic trading is not an attempt to make a trading profit. It is simply a way to minimise the cost, market impact and risk in execution of an order. It is widely used by investment banks, pension funds, mutual funds, and hedge funds because these institutional traders need to execute large orders in markets that cannot support all of the size at once. The term is also used to mean automated trading syste...

In finance, an  electronic trading platform  also known as an  online trading platform , is a computer software program that can be used to place orders for financial products over a network with a financial intermediary. This includes products such as stocks, bonds, currencies, commodities and derivatives with a financial intermediary, such as brokers, market makers, Investment banks or stock exchanges. Such platforms allow electronic trading to be carried out by users from any location and are in contrast to traditional floor trading using open outcry and telephone based trading. Electronic trading platforms typically stream live market prices on which users can trade and may provide additional trading tools, such as charting packages, news feeds and account management functions. Some platforms have been specifically designed to allow individuals to gain access to financia...

Reduced cost of transactions – By automating as much of the process as possible (often referred to as "straight-through processing" or STP), costs are brought down. The goal is to reduce the incremental cost of trades as close to zero as possible, so that increased trading volumes don't lead to significantly increased costs. This has translated to lower costs for investors. Greater liquidity – electronic systems make it easier to allow different companies to trade with one another, no matter where they are located. This leads to greater liquidity (i.e. there are more buyers and sellers) which increases the efficiency of the markets. Greater competition – While electronic trading hasn't necessarily lowered the cost of entry to the financial services industry, it has removed barriers within the industry and had a globalisation-style competition effect. For example, a trader can trade futures on Eurex, Globex or LIFFE at the click of a button – he or sh...

Electronic trading , sometimes called  etrading , is a method of trading  securities  (such as  stocks , and  bonds ),  foreign exchange  or  financial derivatives  electronically.  Information technology  is used to bring together buyers and sellers through an  electronic trading platform  and network to create virtual market places. They can include various exchange-based systems, such as  NASDAQ ,  NYSE Arca  and  Globex , as well as other types of trading platforms, such as electronic communication networks (ECNs), alternative trading systems, crossing networks and "dark pools".  Electronic trading is rapidly replacing human trading in global securities markets. Electronic trading is in contrast to older  floor trading  and phone trading and has a number of advantages, but glitches and cancelled trades do still occur. History For many years stock exchanges were...