What is Internet Trading?

Internet trading (also called “online trading”, “electronic trading” or “investing online”) is a method of trading currencies, financial securities and derivatives. It is based on electronic trading platforms and networks with use of brokerage.

Internet based trading was increased with the rapid development of speed and access of internet connections. Nowadays Internet trading is almost a commonplace and almost everyone can afford it.

There are many advantages of Internet trading, which allowed it to replace phone trading and floor trading. Internet trading gives brokers an opportunity to cut their costs and make commissions for customers lower. Besides, an electronic format provide a high speed of setting and execution of trades. Although glitches and cancelled trades still take place. The main benefit is that the market is now much more accessible than it was earlier.

Anyone who has an internet aссess can open an account and trade even with a small amount of money. This gives casual traders almost full control over their investments. In spite of the fact that customers can set orders for trades via the Internet, but they do not have direct access to the markets. A market order execution is only possible with use of a brokerage firm.

Trading on the Internet includes buying and selling stocks, bonds, options, futures and currencies.

The world’s largest financial market is the foreign exchange market (Forex). The three major stock exchanges are the York Stock Exchange, the NASDAQ (National Association of Securities Dealers Automated Quotations) and the Tokyo Stock Exchange. The stock exchanges are more popular among media, but the bond market is many times bigger.

Internet trade may be quite risky. For example, before start trading on Forex you should understand how the market, a broker and a margin account works. Learn more about basics of Forex trading.

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