Online Trading

Chang-Tseh Hsieh ()
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Chang-Tseh Hsieh: University of Southern Mississippi

Chapter 21 in Encyclopedia of Finance, 2022, pp 753-759 from Springer

Abstract: Abstract The proliferation of the Internet has led to the rapid growth of online brokerage. As the Internet now allows individual investors access to information previously available only to institutional investors, individual investors are profiting in the financial markets through online trading schemes. Rock-bottom fees charged by the online brokers and the changing attitude toward risk of the Internet-literate generation prompt the practitioners to question the validity of the traditional valuation models and statistics-based portfolio formulation strategies. These tactics also induce more dramatic changes in the financial markets. Online trading, however, does involve a high degree of risk, and can cause a profitable portfolio to sour in a matter of minutes. This chapter addresses the major challenges of trading stocks on the Internet, and recommends a decision support system for online traders to minimize the potential of risks.

Keywords: Day trading center; Decision support systems; Financial market; Institutional investors; Internet; Online trading; Portfolio formulation strategies; Risks management; Stock investment; Valuation models; Web-based brokers (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-91231-4_21

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DOI: 10.1007/978-3-030-91231-4_21

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