The Internet’s Impact On Stock Trading

2550 words - 10 pages

"The Internet’s Impact on Stock Trading"

Before the internet, stock trading was done exclusively through brokers. Now that computers and technology have apparent strongholds in the realm of stock trading, more people have access to the market. This essay shares some experiences that online stock trading services and day traders have had due to the radical movement of online trading. The essay commences with a fictional anecdote that describes one man’s unfortunate experience through online trading. It then moves to some non-fictional examples. One company was forced to leave the prospect of trading behind and had to close its services. Another has found refuge in expanding its holdings by moving its primary focus away from online trading services after gaining its initial capital exclusively through this form of business. Individual investors have also gained and lost through internet stock trading. In one example, a retired nurse moves her retirement fund into the stock market in order to make money. And in another, a man invests in technological stock but realizes that they are not as strong as he once thought two years prior. Each of these entities has been affected by the decline in the stock market, and not all were winners. Using research gathered from other publications, this essay’s goal is to focus on the importance of online stock trading and to demonstrate, through analysis, the claim that the industry is vulnerable to an extended decline in the stock market.

It was going to be a sure fire way to make some quick money. In the late 1990’s, high technology and internet stocks were experiencing tremendous gains and a new way of trading stock was being developed. Online trading was in its adolescence, and many would-be investors found this new vehicle to be a great opportunity to jump into the stock game and make money, fast. But soon, many investors would realize that this wasn’t the case.

Jon was one of these would-be investors. He found internet stock trading as a way to break into the stock trading game but the game was not kind to him or his finances. In 1998, he created an account with an online stockbroker, which made trading easier. There was no consultation with a professional broker and stocks could be bought and sold at the click of a button. In addition, the stock market’s boom was kind to investors. Stocks in technology seemed to be always on the rise. Jon invested. He took three thousand dollars and invested under the impression that his money would double or perhaps triple. A mere two years later, these internet and technological companies experienced a realization.

They were vulnerable to an economic decline. In March and April of 2000, the technology boom was no more. In fact, it imploded: it collapsed in upon itself. Investors are still trying to quantify the damages and costs. Jon’s small portfolio was at the mercy of the technology implosion. He too became...

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