Investing has undergone a revolution in a relatively short time: Three decades since the debut of online trading, it now accounts for four out of five equity trades.
Online trading continues to evolve into its own sector, populated by startups and traditional financial institutions, retail and institutional investors alike. Increasing competition, diminishing trade volumes and the need for low-cost execution has driven many financial firms to embrace electronic trading and reap the benefits of lower bid-ask spreads and efficient order management systems.
Legislation like the Dodd-Frank Reform Act may further the trend by mandating that complex derivatives such as credit default swaps be exchange-listed, effectively moving them to online trading.
We’ve captured this phenomenon in our Electronic Trading motif. This basket of 13 stocks consists of exchanges (currently weighted at 61.4 percent), trading platforms (22.6 percent), and brokerages (16.1 percent). And now we’re giving you the chance to buy the Electronic Trading motif commission-free between now and July 24, through our Motif of the Week promotion.