Impact-Of-Technology-In-Trading-Venutradex

Impact of Technology in Trading

Do Technologies Impact Trading ??

Technology has become the root of every aspect of our lives. The way we communicate, we work & live was rapidly changed by technology. Now the technology has a significant impact on the way we trade. The rise of technology has changed the route of investment. Online trading has motivated people to start trading in the stock market due to the increase in the advent of technology. The one who has an internet connection with a computer/laptop or smartphone can register themselves with an online broker and start trading. Let’s check out the impact of technology in trading.

THEN AND NOW – Trading & Technology

Before the rise of the technology in trading, if anyone wanted to trade in stocks, they need to call a stockbroker to place an order. The commission on buying and selling was usually fixed on the higher end, because of the lack of information. 

The emergence of technology arrived in the ’80s & ’90s as the online trading platforms emerged. People started using the computer for trading, which grew the high-frequency trading, forex trading etc.

As technology ushered, products like ETFs developed. Trading in today’s scenario has become easier than it was before. Information regarding any stocks, funds, investment options, brokerage, etc. can be availed through the web.

The online trading account can be opened in minutes if you have a computer and an internet connection. The investor can start trading in minutes by just filling a form online, uploading documents in seconds & depositing funds in a few minutes. Nowadays, brokerage firms have come up with mobile applications so that investors can track their portfolio anytime, anywhere.

ONLINE TRADING

Internet trading has profoundly impacted the experience of investors in trading. Now there is no third person between an investor and his trade. Today online trading has made a direct connection between investors and their deals, where they can execute their orders by their own. Online trading has also given access to investors to apply for IPO’s.

SOCIAL WEB

Worldwide there are 3.80 billion social media users as on January 2020. The number has increased by around 9% (321 million new users) since this time last year. With such massive growth, social media has made a gigantic representation in the field of trading. Social media helps in tracking a lot of things in investing. Social media has become the fastest way to access the breaking news which provides essential updates for traders and investors.

CIRCUIT BREAKERS

To safeguard against the panic selling circuit breakers are employed by the stock exchanges. It helps in controlling the extreme volatility in particular stocks. For the seamless functioning of circuit breakers in stock market technology has played a vital role. The systems are designed to control the panic selling.

ELECTRONIC STOCK EXCHANGE

The first online stock market was introduced by NASDAQ, which allowed users to trade electronically. Now, most of the stock exchanges are automatic–traded exchanges, where both the buyers and sellers meet virtually and exchange different kinds of financial securities like bonds, stocks, commodities, currencies and derivatives.

TERMINALS

Terminals were first introduced in the ’60s, but due to the advancement in technology, the terminals have also become advanced. We have seen a significant improvement in the information available to the traders because of the advancement in technology. Cloud-based software are in the use which can be accessed by any device.

ALGORITHM

The computer-based algorithms use programmatic rules to analyze trading, timing, volume, and other factors at a rapid rate. 

HIGH-FREQUENCY TRADING

HFT platforms allow investors to execute the number of orders and scan numerous markets and exchange in just a few seconds.

CONCLUSION

Technology has made a seamless route for trading, and in the coming future, there would be many more technological advancements. Technologies like Big Data and Artificial Intelligence will be used to take trading & investing to the next level. Trading technologies will continue to evolve along with the time. 

Also Refer To…

Discount Broker – A Knack To Economize Commission Rates

Importance Of Tools For Smart Investment

Venus Tradex – The Modern Discount Broker In India

 

RISK DISCLOSURES ON DERIVATIVES

  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to ₹ 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

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