Electronic Trading Market Research
Electronic Trading is a modern method of buying and selling securities.
Investors can also use it for foreign exchange and financial derivatives. Such methods are also known as e-trading. They became popular in the 1990s thanks to technological improvements. They are now taking over from old-style techniques such as phone trading. One of the main advantages of Electronic Trading is the speed of doing transactions. Investors now have instant access to several ways to trade, including:
An Exchange-Traded Fund, or ETF, involves a collection of securities, such as stocks. These funds often track an underlying index, which is a hypothetical portfolio of investment assets. This portfolio represents a section of the financial market. An ETF can use many strategies, and it can invest in any amount of industry sectors. A well-known example is the SPDR S&P 500 ETF. It tracks the S&P 500 Index.
Index Funds are a variation of Mutual Funds. They have a portfolio built to track or match the workings of a financial market index. Certain investment vehicles use Index Funds as part of their core portfolio holdings. “Indexing” is a method of passive fund management. Almost every financial market in existence has an index. And nearly all have Index Funds.
The Rise of FinTech
FinTech is short for Financial Technology. It is the new tech that seeks to automate and develop the distribution and use of financial services. At first, the term described the back-end systems of well-known financial institutions. The definition of the word is now more consumer-oriented. FinTech also includes the development and use of cryptocurrencies such as Bitcoin.
The FinTech industry is developing new apps catering to Millennials who like ETFs.
Millennial investors face several challenges. For example, they need the ability to invest small balances without having to pay high fees. Apps such as Stash solve that by allowing users to buy fractional shares of more than 60 curated ETFs. Robinhood is another app, which introduced commission-free trading. The platform holds more than 5000 stocks and ETFs.
FinTech has also led to Algorithmic Trading, a modern method for completing orders.
Algorithmic Trading uses automated and pre-programmed commands. These commands account for variables such as timing, price, and volume. Algorithmic Trading uses mathematical models and intricate formulas under human supervision. It helps investors decide whether to buy or sell financial securities on an exchange. The practice of do-it-yourself Algorithmic Trading has become widespread in recent years.
The rise of FinTech poses challenges for established companies to make profits.
Algorithmic Trading software and electronic execution have diminished the human role. Machines do most of the buying and selling of securities. The cavernous trading floors are now relics of a bygone era. Investors now use Electronic Trading Platforms to trade billions of shares of stock every day.
The modern practice of using electronic trading platforms has plenty of benefits. Here’s a shortlist of electronic trading platforms:
- TD Ameritrade
- Charles Schwab
- Fidelity Investments
- Merrill Edge
Electronic Trading Market Research Solutions
With FinTech, it is now possible to fashion the perfect trading environment. In such a situation, there are no costs or other limitations on transactions. This frictionless market, as it is known, is a theoretical concept. It’s excellent for research purposes or for promoting market concepts. It engages respondents and produces real insights.
SIS International offers frictionless market research. We work for those wishing to engage in Electronic Trading. We also provide services to electronic trading companies, where we give insights into new or existing markets. SIS provides Qualitative and Quantitative Market Research. We use Focus Groups and other modern methods of data collection. Contact us today to find out how we can help with your Electronic Trading Market Research.