Execution only Trading

Execution-only trading is exactly what the name implies, trading without advice or help from a broker or an investment guide. These types of deals are generally carried out on on-line and are not typically what investors will find when they go into the local offices of trading companies.

In fact it was the Internet and the fast way one could buy into the share of a hopeful company and spend little time at it that prompted this new way of buying and selling stocks. Of course along with this newer method of training there are more risks involved for the novice or for that matter for the veteran trader. No longer does he have the assurance of knowing that the broker will be there to help him make sense of it all. Those trading execution-style are doing so at their own risk

Of course dealing in the stock market never gave assurances that should the deal turn sour you would get a refund, but it often had for warnings and advice that went along with the hefty fees investors paid to their advisers. All this is a trade-off, of course, and has become necessary because the enormous amount of trading that goes on over a telephone or on-line.

Execution style trading can be likened to the grocery store that has no frills, no fancy showcases, no check out help, and where you have to pay a quarter to use a cart. And like it money is saved with a little effort on the shopper’s part. And also like the no-nonsense grocery stores sometimes you get poorer quality.

Although the company and the buyer both save time and money when trading in an execution-only style, there are other reasons for the onslaught of execution style selling of stocks and bonds. Mainly, a lot of confusion has been avoided. And whether or not a big deal has been lost or made is sometimes irrelevant. The learn-by-doing investor has taken matters into their hands and has done things their way and that’s what’s important to their way of thinking. And as long as money is being spent the sellers are happy.

Most people know what they’re doing when they buy into the stock market online, else why would they be fooling around in such unknown areas? Probably they’re satisfying a gambling urge by pretending to themselves and to others that it is legitimate. The same people that would never think of putting money into slot machines have no qualms about buying into stocks and bonds on-line.

To reiterate, according to an online source “An execution only stockbroker offers a ‘dealing only’ service where no advice is given. This means that the investor bears all responsibility regarding investment decisions. The instructions to deal are usually made online or by telephone. The service is commission based and usually very low cost to the investor. This is now the mainstay of most stockbroking firms.”