Subject: Trading - Electronically and via the Internet

Last-Revised: 8 Sep 1998
Chris Lott (contact me)

Many brokerage houses offer an electronic communications path for placing orders on the equities and options markets. In the past many services offered dial-up access, but with the Internet reaching ever larger numbers of people, access today is primarily via the 'net and secure HTTP connections. Some of the services offer both, which can be a big advantage if "www" translates into "world-wide wait" for you.

The primary motivation for using one of these services is lowering commissions. Competition among the on-line brokerages has become intense, and rates have dropped as low as $8 per trade. The only caveat is that many on-line brokerages require a significant cash balance, even as much as $10,000, before you can place trades.

Here's a few web resources with more information:

• The Securities Industry Association offers a brochure for investors titled Online Investing Tips. Although it has only about 5 short pages of information, the file is over 1Mb, and you will need a copy of the free Adobe Acrobat reader to view it. It's available from this page:
  http://www.sia.com/publications/html/education.html
• The links page on the FAQ web site about trading has links to many brokerage houses.
  http://invest-faq.com/links/trading.html
• If you'd like to compare the response times of the web brokers, visit Keynote Systems and look for the Keynote Web Watch of broker trading.
  http://www.keynote.com/