In a brokerage firm, the basic operation going on is the trading of securities by which individual investors and traders participate in, and when the trading is performed over an electric network, this procedure is called investing online or online trading. Since the late 1990s, trading and investing has become the custom for individual investors with brokers offering investment services using a wide variety of online trading platforms.
Prior to the introduction of the Internet, investors placed their orders through a stockbroker, either in person or via telephone and, later on, the brokerage firm entered into the system and was linked to trading floors and exchanges. It was K. Aufhauser & Company, in August 1994, became the first brokerage firm to offer trading via its online investing company, which experienced significant growth for trade investment from that time on, such that investors at this website could now enter their orders directly online or can trade with other investors via electronic communication networks or some online orders are routed through brokers, allowing agents to approve or monitor the trades. Since online orders are allowed to be routed through brokers, this step helps protect both the client and brokerage firm are protected from unlawful or incorrect trades which could affect the client’s portfolio or the stockbroker’s license.
In the US, online brokers at this site are known as discount brokers, but in Europe and Asia, these so-called online brokers affiliate with high-net-worth individuals, whose financial assets have a value greater than $1 million; and the popularity of these online brokers is due to the speed and ease of their online order entry and, at the same time, the fees and commissions are significantly lower than those coming from full service brokerage firms within the US.
Investors who trade through an online brokerage firm are provided with an online trading platform, which acts as the hub, allowing investors to purchase and sell securities, like fixed income, equities/stock, options, and mutual funds. The platforms further have mechanisms that have the capability to to track and monitor securities, portfolios and indices, as well as research tools, real-time streaming quotes and up-to-date news releases, all of these are necessary gears to trade profitably. Visit this website at http://www.ehow.com/how_2195910_invest.html and know more about investments.
Since there are risks in trading investments, financial regulators warn potential investors against fraudulent online brokers, and advises investors to do research of the online brokers they plan to employ, such as determining if the brokerage firm is fully licensed and in what state, provincial or national jurisdiction. The US Federal Government has cautioned investors of online investment scams, and, in view of that, it has put up their OnGuard online website, which advises investors on being wary of investment lures in internet newsletters, investing blogs, or bulletin boards. There are also stock manipulators that often float false information and hot tips on investment sites, as part of their effort to affect the stock prices of shares in a particular security; and, therefore, investors are strongly advised to turn to unbiased sources when researching investments, like the US Securities and Exchange Commission. There are instances when inexperienced online investors trade without help from a trained stockbroker or investment adviser, such that they do not fully understand the potential risks of investing in a particular security, and so they become easy prey to stock manipulation; and for this reason, many legitimate online brokers offer a number of investment tools to educate and inform new investors.