Nowadays, finance and investment are very important and more and more people are showing interest in this to become successful. One of the simplest exercises of exporting stocks and other contractual holdings is the electronic trading. Also referred as trading, this is a convenient method of trading stocks, financial derivatives and foreign exchange electronically. With the help of IT (information technology), buyers and sellers across the world have been brought together through electronic trading platform and other networks to create virtual market places such as NYSE, NASDAQ, globex and Arca. It helps to get in touch with the web services and centralize asset dealings.
Advantages of electronic trading
There are various advantages and disadvantages of electronic trading. One of the biggest advantages of this is the ease of access. All you need is an internet connection and balance in your checking account which you need to invest. Other advantage of electronic trading is the cost of transactions. As this type of services are automated, it reduces the cost of placing traders as well as transaction fees. If you take the help of professional service providers, they will ask for high responsibilities. But with the electronic trading, you can direct your own investments as well as can buy and sell whenever you wish. The next advantage of e-trading is its great convenience. If you have access to internet, you can trade anytime and from anywhere. Thus, it offers greater convenience as compared to conventional stock broker. Furthermore, you can also choose from the array of subscription levels as per your need. Some accounts are free and other charge some amount of monthly fee.
Disadvantages of electronic trading
Along with several advantages, it also has various disadvantages too. Trading is almost like a gamble and someone new to it will surely end up being addicted. This can obviously lead to a loss of great amount of money. Some people invest large amount of money on margins and exceed their credit line. Later on, to get over those losses they take bigger risks. It does not always guarantee success and sometimes you have to bear the losses. As a trader, you need to complete specific activity and minimums as per the broker. Sometimes, even if you do not want to trade, broker will ask you foractivity fee. When new traders who are greedy make large investments, they suffer from huge losses and risks. To conclude, if done carefully and in limits, this is really a great option to pursue for all.