Many traders in the stock market are moving to short-term approaches and taking advantage of today's technology. Here's a walk through the basics.
Welcome to the battlefield of electronic
daytrading. The confluence of technology
and trading has created a network
of daytraders with access to
real-time quotes, news and instantaneous
executions. Of all markets that
daytraders have access to, NASDAQ
(the North American Stock Dealers
Automated Quotation system) has
emerged over the past several years as a primary trading arena.
Each NASDAQ stock is represented by a group of market
makers and electronic communication networks (ECNs) that
compete for bids and offers. Market makers are represented
by institutions such as Goldman Sachs, Merrill Lynch and
Morgan Stanley. ECNs are private trading networks that are
offered to the public through a limited number of brokers.
These brokers give traders access to the Small Order Execution
System (SOES) — Instinet, SelectNet, the Island and others.