Hidden costs in on-line trading; new networks unsettle markets

Article Abstract:

The use of electronic communications networks (ECNs) for Internet-stock trading is becoming more widespread. Because these networks bypass the market makers, the firms which traditionally execute Nasdaq market stock trades for investors, there is a reduction in trading costs. Market makers make profits from the difference between a stock 'buy' price and the price they charge to sell the stock. ECNs make profits by buy-and-sell order price-matching, for which they collect a fee. However, some of these trades are not executed at the best price and many are not executed at all because there is no link between ECNs. In 1998, market makers had better prices on 80% of the Nasdaq stocks than did ECNs. The Nasdaq market's lack of a central trading floor has fragmented the market and ECNs are dispersing it even more, making it less likely for investors to see price-matching in buy and sell orders and contributing to the higher volatility of Nasdaq stocks.

Electronic computers, Electronic Computer Manufacturing, Services information, Securities prices, Stock Information Systems, Economic aspects, Stocks, Online transaction processing, Electronic trading (Securities), Online securities trading

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Wild rides on stock market begin in Internet chat rooms

Article Abstract:

Stock picker Joe Park, also know as Tokyo Joe, or Tokyo Mex flexxed his influence by recommending Information Management Associates at his chat room, Tokyo Joe's Societe Anonyme, then watched as shares went from $4 to $14. Investors are increasingly subscribing to chat rooms of so-called stock market Internet gurus able to move individual stocks in wild arcs. However, many are suspicious of the lack of accountability of the people running the chat rooms, as well as their experience. Trading-places.net front man Chris Rea designed mailers for auto dealers before opening his chat room. Securities regulators aren't advertising if they are having an investigation of this phenomenon.

On-Line Information Services, Videotex & Teletext, Telegraph & other communications, Securities issued, listed, Security brokers and dealers, Securities Brokerage, Securities Trading, Statistical Data Included, Securities industry, Technology application, Securities, Company securities, Chat rooms, Park, Joe, Information Management Associates

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