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How New Technologies Are Revolutionizing The Way Stock Markets Operate

The stock exchange is one of the primary drivers of economic growth in most nations due to technology

21Nov

Technology has transformed the way markets operate, leaving the public unaware. Many people think that share trading is an activity that occurs on the stock exchange’s floor with human intervention. However, it only takes sixteen microseconds to complete a stock trade utilizing a system created by a US-based trading tech firm known as Algo Technologies. Trading occurs via underground fibre-optic networks, which allow the exchange of messages between trading institutions’ computer systems and various data centers that host the trading engine of trade. Thanks to technology, the stock exchange is one of the primary drivers of economic growth in most nations. For instance, the world’s two fastest growing and largest stock markets lie in the New York City and Manhattan’s Wall Street area.

1. Electronic trading

Electronic trading has promoted the occurrence of high frequency trading. Individuals utilizing this trading method can purchase and sell stock in the same day. At times, they can execute a complete buy-and-sell cycle within a few minutes. Apart from influencing the occurrence of 'day trading' for individuals, high frequency trading has allowed corporate investors to trade in millions of stocks within minutes. Electronic trading can stir a buying or selling passion among traders who want to engage in what they view as a developing trend in a certain stock.

2. Online research

Securities and Exchange Commission (SEC) has confirmed that investors have exceptional access to information concerning businesses and their stocks. Latest share prices, earnings reports, and news concerning stocks and the firms issuing them are some of the information available on the Internet. Financial advisers can ensure their clients are aware of the current development in the stock market. On the other hand, companies can monitor the performance of the shares or bonds in real time. The outcome of this timely delivery of information is well-informed investors, financial advisors, and traders. For instance, a quick online research will show you that the e cig juice is the newest segment of the tobacco sector that is experiencing a fast-paced growth. A premium e juice is a subclass of vaporizers developed as a tobacco reduction product. The E-cig utilizes a flavored liquid like cotton candy, bubble gum, and nicotine mixture dissolved in propylene glycol or vegetable glycerin solution.

3. Direct mail campaigns

The consumer purchase process is an intertwined combination and synchronization of several channels and direct mailing still plays an instrumental role. Companies have mastered the art of personalizing emails before sending them to investors or traders. That way, the recipient views the direct mail as an invitation rather than like spam. These emails promote an increase in the number of traders who are engaging in the selling and buying of stocks.

4. The computer and the modern stock market

Automation is revolutionizing the operation of the stock exchange. For instance, the NYSE specialist utilizes computers to direct orders via an automated system called Designated Order Turn-about (DOT). The computerized routing systems bypass the telephone clerks and floor brokers by linking member companies directly to the exchange floor’s trading post. DOT has enhanced stock trading by making initiations faster, quicker, accurate, and inexpensive. 

5. The birth of algorithms

The deployment of algorithms into the stock markets has redefined the way brokers purchase and sell stocks. Algorithm trading utilizes computer programs, which follow specific instructions to compute chart patterns to make wise investments. Precisely, algorithms establish the perfect timing, cost, quantity, as well as routing of orders by dynamically keeping track on market conditions across diverse trading and securities venues.

Technology has transformed the way trading occurs in the stock markets. Nowadays, satellites convey fluctuations in stock prices instantly across the globe. Computer systems are utilized to initiate small trades without any intervention from exchange professionals. Developments in technology will continue to promote and accelerate the globalization of stock trading.

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