Electronic funds transfers (EFTs) are faster, more efficient, and less expensive than paper check transactions. They are also said to be safer and more secure. Many individuals, however, question whether or not EFT transactions are as safe as they are cracked up to be.
First, it is important to realize that no payment or collection system is 100% safe. There is always the potential, no matter how small, for things to go wrong. Errors are possible, and foul-ups occur, even with the most advanced technologies in place. That said, many experts assert that EFT offers an extremely high level of security. In fact, EFT transactions are considered to be far safer than dealing with paper checks.
Each year, an untold number of checks are lost in the mail. This is one risk that is immediately eradicated through the use of EFT transactions. There is nothing to be mailed, and therefore, nothing to lose. EFT transactions also help to reduce the risk of check fraud.
With an EFT transaction, you are required to reveal sensitive information to the business or organization with which you are making the transaction. This information may include bank account and routing numbers, as well as your home address and phone number. Without question, providing this information to the wrong parties is a recipe for disaster. As long as you limit yourself to providing this information to merchants and organizations you trust, however, your confidential information should be perfectly safe.
To ensure your safety in EFT transactions, it is wise to take certain precautions. When sending information via the Internet, do so only with websites that offer secure encryption technology. If the company you are dealing with doesn’t offer this level of protection, you would be wise to find another way to make or receive payment.
Be sure to carefully review your bank statements each month, checking for errors. If you spot errors or suspicious activity, report it to your financial institution right away. Your liability for erroneous transactions may be limited, as long as you report the problem within a reasonable time frame. For example, in the United States, consumers are liable only for the first 50 US Dollars (USD) of a fraudulent EFT transaction, provided that it is reported within two days of receiving a bank statement listing the transfer.
If you wait to report problems after that two-day period, your liability goes up. Consumer liability is capped at 500 USD for reports made within 60 days of receiving the bank statement. After the 60-day mark, consumers risk losing all the money involved in the fraudulent transfer.
All in all, EFT transactions are far safer than writing paper checks. When you pay by check, you make it possible for anyone who happens to see your check to obtain your bank account and routing numbers. Often, paper checks pass through many hands on their way to the bank. Anyone who lays eyes on your check has the opportunity to steal your information and use it to obtain money from your account. EFT transactions are encrypted for transmission, decreasing the risk of unlawful interception.
Tuesday, February 5, 2008
Broker/dealer
Performing a double role for clients, a broker/dealer takes on both the responsibilities of a broker and a dealer. In their roles as dealers, a broker/dealer will act on the behalf of the brokerage firm, initiating transactions that involve the firm’s account. As brokers, the broker/dealer will focus on the needs of clients of the firm, handling transactions that are placed on behalf of client accounts.
While functioning on behalf of the firm, the broker/dealer will go about the usual business of buying and selling securities on behalf of the brokerage. This will involve all the usual aspects that are involved with creating transactions. The broker/dealer engages in trades that involve both the buying and selling of various stocks, bond, and other securities. As in all types of financial transactions, the broker/dealer will perform due diligence in investigating the background of an investment opportunity, making sure the investment is in the best interests of the firm, and seek to secure the investment as the best price possible.
As a dealer who is charged with the responsibility of handling transactions on behalf of the client, the broker/dealer will interact with each customer of the firm to ensure that transactions are conducted in a timely manner. When possible, the broker/dealer may also work to obtain a more favorable price for an investment, making use of the connections cultivated by the firm. Just as an investment dealer, the broker/dealer will seek to serve the client in the most professional manner possible, offering advice and researching potential investment deals that may be of interest to the investor.
A professional broker/dealer will make sure to keep the business transactions that are conducted on behalf of the firm, as well as those orders that are executed for a client, in the strictest confidence. With access to proprietary information that relates to both the client base and the brokerage firm itself, the broker dealer is in a unique position. The broker/dealer is generally well organized, takes his or her responsibilities seriously, and derives a great deal of satisfaction in helping both the brokerage firm and the client to increase the value of their respective portfolios.
While functioning on behalf of the firm, the broker/dealer will go about the usual business of buying and selling securities on behalf of the brokerage. This will involve all the usual aspects that are involved with creating transactions. The broker/dealer engages in trades that involve both the buying and selling of various stocks, bond, and other securities. As in all types of financial transactions, the broker/dealer will perform due diligence in investigating the background of an investment opportunity, making sure the investment is in the best interests of the firm, and seek to secure the investment as the best price possible.
As a dealer who is charged with the responsibility of handling transactions on behalf of the client, the broker/dealer will interact with each customer of the firm to ensure that transactions are conducted in a timely manner. When possible, the broker/dealer may also work to obtain a more favorable price for an investment, making use of the connections cultivated by the firm. Just as an investment dealer, the broker/dealer will seek to serve the client in the most professional manner possible, offering advice and researching potential investment deals that may be of interest to the investor.
A professional broker/dealer will make sure to keep the business transactions that are conducted on behalf of the firm, as well as those orders that are executed for a client, in the strictest confidence. With access to proprietary information that relates to both the client base and the brokerage firm itself, the broker dealer is in a unique position. The broker/dealer is generally well organized, takes his or her responsibilities seriously, and derives a great deal of satisfaction in helping both the brokerage firm and the client to increase the value of their respective portfolios.
Zero-minus tick
Commonly known as a zero-minus tick, the zero downtick is an investment strategy that is often employed in currency trading. While the approach may be employed in several different types of investment markets, the actual structure of the zero downtick often makes it less relevant to markets other than the Forex market, and in fact may be impeded by specific regulations that govern some markets. Still, the zero downtick is a method that many investors can employ successfully from time to time.
The basis for the zero downtick involves the careful structuring of two sets of transactions. Each set will include two individual transactions that are conducted using the same price. The second set in the series will involve a price that is slightly less than the previous set of transactions. As an example, the first set may feature a price of 30, while the following set will sport a price of 28. The resulting downswing in the price is referred to as a downtick. When conducted in sets of two, the zero downtick is created, since there is no change in the difference between the price of the current transaction and the previous one.
The reasoning behind the zero downtick is to create a situation where a short is created. Depending on the conditions that impact certain markets, it may be impossible to structure a short with the use of a zero downtick. In these environments, the effect can only be achieved by creating a zero uptick. Zero upticks work in a reverse order to zero downticks, a progression that may or may not be appropriate for the market in question.
One important aspect to keep in mind is that the use of shorts to realize a profit may be restricted in some markets. The currency market generally is not impacted by restrictions or regulations related to the use of a short, although there is the potential for regulations on a national level to have some small degree of influence. Thus, the Forex market is an ideal environment for the implementation of either a zero uptick or a zero downtick.
The basis for the zero downtick involves the careful structuring of two sets of transactions. Each set will include two individual transactions that are conducted using the same price. The second set in the series will involve a price that is slightly less than the previous set of transactions. As an example, the first set may feature a price of 30, while the following set will sport a price of 28. The resulting downswing in the price is referred to as a downtick. When conducted in sets of two, the zero downtick is created, since there is no change in the difference between the price of the current transaction and the previous one.
The reasoning behind the zero downtick is to create a situation where a short is created. Depending on the conditions that impact certain markets, it may be impossible to structure a short with the use of a zero downtick. In these environments, the effect can only be achieved by creating a zero uptick. Zero upticks work in a reverse order to zero downticks, a progression that may or may not be appropriate for the market in question.
One important aspect to keep in mind is that the use of shorts to realize a profit may be restricted in some markets. The currency market generally is not impacted by restrictions or regulations related to the use of a short, although there is the potential for regulations on a national level to have some small degree of influence. Thus, the Forex market is an ideal environment for the implementation of either a zero uptick or a zero downtick.
Zero-plus tick
Sometimes referred to as a zero-plus tick, the zero uptick involves the execution of a transaction at the same price as the last completed transaction. However, the price on these two recent transactions will be higher than the price involved with the two transactions that immediately preceded them. While the process may be somewhat difficult to explain, the actual execution involves a simple set of progressive steps.
Because the zero uptick involves the execution of two sets of two transactions, the point of zero upticks is to group the transactions and set the transaction price for each set at a rate that will result in profiting from a decline in price. As an example, if the first and second transactions in the series are executed at a rate of 25, then the next set of two transactions will need to take place at a higher rate. The rate for the second set of transactions does not have to be significantly higher in order for the uptick to work. Even a transaction price of 26 for the second set of transactions will work well, depending on the specific market conditions.
It should be noted that the implementation of a zero uptick might not work equally well in all investment markets. Since the process does involve applying a short to the transaction sequence, there may also be some restrictions on the use of the technique. One market where there are few restrictions on the use of shorts is in the currency market. A short is often utilized in the Forex market, and with an appreciable degree of success.
The zero uptick is the opposite of a zero-minus tick, in which the sequence of the use of prices is descending rather than ascending. However, the end result of both techniques can be the same, depending on the set of circumstances that currently prevail in the particular market. While the approach is relatively easy to master, the same level of care should be used in applying the zero uptick that would be used with any market strategy.
Because the zero uptick involves the execution of two sets of two transactions, the point of zero upticks is to group the transactions and set the transaction price for each set at a rate that will result in profiting from a decline in price. As an example, if the first and second transactions in the series are executed at a rate of 25, then the next set of two transactions will need to take place at a higher rate. The rate for the second set of transactions does not have to be significantly higher in order for the uptick to work. Even a transaction price of 26 for the second set of transactions will work well, depending on the specific market conditions.
It should be noted that the implementation of a zero uptick might not work equally well in all investment markets. Since the process does involve applying a short to the transaction sequence, there may also be some restrictions on the use of the technique. One market where there are few restrictions on the use of shorts is in the currency market. A short is often utilized in the Forex market, and with an appreciable degree of success.
The zero uptick is the opposite of a zero-minus tick, in which the sequence of the use of prices is descending rather than ascending. However, the end result of both techniques can be the same, depending on the set of circumstances that currently prevail in the particular market. While the approach is relatively easy to master, the same level of care should be used in applying the zero uptick that would be used with any market strategy.
A choice market
A choice market is a stock market phenomenon that does not occur on a frequent basis. Essentially, a choice market is a short-lived condition in which there is no spread between the bid price and the ask price for a given investment. In other words, the security can be purchased or sold for the same price.
There are a couple of factors that must be present in order for a choice market to appear. First, there must be an extremely high amount of liquidity occurring within the market at that time. When this high amount of securities are being dumped on the open market, it may depress demand and drive prices down on given securities. The end result is that while the stock or commodity may be purchased for a good price, the ability to resell the same commodity at a profit simply does not exist.
A second factor that helps to create a choice market is a temporary limitation on the number of intermediaries available in the market. This condition will often come about as result of the high liquidity factor, in that an extreme amount of liquidity will directly impact the function and availability of intermediaries. When the period of high liquidity lasts for an extended amount of time, limited intermediaries are likely to take place and reinforce the presence of a choice market.
While a choice market can occur in just about any type of securities or trading market, the most frequent appearance of this phenomenon is within the Forex or currency trading market. It is not unusual for currency pairs to have a temporary spread of zero, or to at least experience a situation where the difference is one basis point or less. When the market for a stock or currency is this close to being zero, the situation is often understood to be a precursor to the onset of a choice market.
There are a couple of factors that must be present in order for a choice market to appear. First, there must be an extremely high amount of liquidity occurring within the market at that time. When this high amount of securities are being dumped on the open market, it may depress demand and drive prices down on given securities. The end result is that while the stock or commodity may be purchased for a good price, the ability to resell the same commodity at a profit simply does not exist.
A second factor that helps to create a choice market is a temporary limitation on the number of intermediaries available in the market. This condition will often come about as result of the high liquidity factor, in that an extreme amount of liquidity will directly impact the function and availability of intermediaries. When the period of high liquidity lasts for an extended amount of time, limited intermediaries are likely to take place and reinforce the presence of a choice market.
While a choice market can occur in just about any type of securities or trading market, the most frequent appearance of this phenomenon is within the Forex or currency trading market. It is not unusual for currency pairs to have a temporary spread of zero, or to at least experience a situation where the difference is one basis point or less. When the market for a stock or currency is this close to being zero, the situation is often understood to be a precursor to the onset of a choice market.
The spot market
The spot market is a securities or commodities market where goods, both perishable and non-perishable, are sold for cash and delivered immediately or within a short period of time. Contracts sold on a spot market are also effective immediately. The spot market is also known as the “cash market” or “physical market.” Purchases are settled in cash at the current prices set by the market, as opposed to the price at the time of delivery. An example of a spot market commodity that is regularly sold is crude oil; it is sold at the current prices, and physically delivered later.
A commodity is a basic good which is interchangeable with other like-kind commodities. Some examples of commodities are grains, beef, oil, gold, silver, electricity, and natural gas. Technology has entered the market with commodities such as cell phone minutes and bandwidth. Commodities are standardized, and must meet specific standards to be sold on the spot market.
The world spot market, or foreign currency trading (Forex), is a huge spot market. It is the simultaneous exchange of one nation’s currency for another’s. The way it works is through an investor selecting a currency pair.
Great Britain (GBP) and the United State’s (USD) currency is a common pair that is bought and sold on the world spot market. If the GBP is gaining strength against the USD, the investor buys. If it is weak, he sells. The benefit of foreign currency is that it is very liquid; an investor can enter and exit the market as he chooses.
The spot market differs from the futures market in that the price in the futures market is affected by the cost of storage and future price movements. In the spot market, prices can be affected by current supply and demand, which tends to make the prices more volatile.
Another factor that affects spot market prices is whether the commodity is perishable or non-perishable. A non-perishable commodity such as gold or silver will sell at a price which reflects future price movements. A perishable commodity such as grain or fruit will be affected by supply and demand. For example, tomatoes bought in July will reflect the current surplus of the commodity and will be less expensive than in January, when demand for a smaller crop drives costs up. An investor cannot purchase tomatoes for a January delivery at July’s prices, making tomatoes a perfect example of a spot market commodity
A commodity is a basic good which is interchangeable with other like-kind commodities. Some examples of commodities are grains, beef, oil, gold, silver, electricity, and natural gas. Technology has entered the market with commodities such as cell phone minutes and bandwidth. Commodities are standardized, and must meet specific standards to be sold on the spot market.
The world spot market, or foreign currency trading (Forex), is a huge spot market. It is the simultaneous exchange of one nation’s currency for another’s. The way it works is through an investor selecting a currency pair.
Great Britain (GBP) and the United State’s (USD) currency is a common pair that is bought and sold on the world spot market. If the GBP is gaining strength against the USD, the investor buys. If it is weak, he sells. The benefit of foreign currency is that it is very liquid; an investor can enter and exit the market as he chooses.
The spot market differs from the futures market in that the price in the futures market is affected by the cost of storage and future price movements. In the spot market, prices can be affected by current supply and demand, which tends to make the prices more volatile.
Another factor that affects spot market prices is whether the commodity is perishable or non-perishable. A non-perishable commodity such as gold or silver will sell at a price which reflects future price movements. A perishable commodity such as grain or fruit will be affected by supply and demand. For example, tomatoes bought in July will reflect the current surplus of the commodity and will be less expensive than in January, when demand for a smaller crop drives costs up. An investor cannot purchase tomatoes for a January delivery at July’s prices, making tomatoes a perfect example of a spot market commodity
Currency Exchange
In a world that operates with a number of different currencies around the world, there is a need for services that allow for the orderly conversion of one type of currency to another. This is where the concept of a currency exchange comes into being. Essentially, a currency exchange is a service that is able to accept currencies of different countries and provide currency for a particular country in exchange. Transactions of this sort are conducted for a fee, and at the current rate of exchange.
A currency exchange service also is able to provide a number of other services that are related to foreign money, document provision, and currency trading. Here are some examples of what a currency exchange normally provides in the way of services to the customer.
Along with the basic exchange of currency from one country to that of another country, a currency exchange also can assist with the process of wiring funds from one country to another. As part of the process, the currency exchange conducts the conversion from one currency to another, if necessary. Because a currency exchange normally has a strong working relationship with international banking, the current rate of exchange is always used. Also, the relationship with international banking ensures that a currency exchange can conduct the wire transfer to just about anywhere in the world.
A currency exchange is also helpful in obtaining and cashing traveler’s checks. Many vacationers prefer to use traveler’s checks as a way of taking along money, since they can be replaced with relative ease if stolen. The currency exchange is able to issue the checks on behalf of a number of different financial institutions, as well as honor the traveler’s checks when presented for payment.
Transfer of documents and the buying and selling of rare coins can also be conducted through a currency exchange. The documents may range from such mundane matters as car titles and license plate renewal forms to items such as detailed contracts. The coins may be bought and sold, with the funds being transferred through the electronic funds transfer network that is used by the currency exchange. As with all services, there is a fee to pay. However, a solid currency exchange, such as the international Casa de Cambio network of exchangers, are able to conduct transactions in a time frame that is much shorter than other means. While the fees may vary from country to country, completing a transaction is a short period of time may be highly desirable, and thus worth the fee charged by the currency exchange.
A currency exchange service also is able to provide a number of other services that are related to foreign money, document provision, and currency trading. Here are some examples of what a currency exchange normally provides in the way of services to the customer.
Along with the basic exchange of currency from one country to that of another country, a currency exchange also can assist with the process of wiring funds from one country to another. As part of the process, the currency exchange conducts the conversion from one currency to another, if necessary. Because a currency exchange normally has a strong working relationship with international banking, the current rate of exchange is always used. Also, the relationship with international banking ensures that a currency exchange can conduct the wire transfer to just about anywhere in the world.
A currency exchange is also helpful in obtaining and cashing traveler’s checks. Many vacationers prefer to use traveler’s checks as a way of taking along money, since they can be replaced with relative ease if stolen. The currency exchange is able to issue the checks on behalf of a number of different financial institutions, as well as honor the traveler’s checks when presented for payment.
Transfer of documents and the buying and selling of rare coins can also be conducted through a currency exchange. The documents may range from such mundane matters as car titles and license plate renewal forms to items such as detailed contracts. The coins may be bought and sold, with the funds being transferred through the electronic funds transfer network that is used by the currency exchange. As with all services, there is a fee to pay. However, a solid currency exchange, such as the international Casa de Cambio network of exchangers, are able to conduct transactions in a time frame that is much shorter than other means. While the fees may vary from country to country, completing a transaction is a short period of time may be highly desirable, and thus worth the fee charged by the currency exchange.
After-hours trading
As a means of meeting the demands of the modern world, after-hours trading involves the ability to engage in the trading of stocks and securities after the regular hours of operation of the market has passed for the day. Here are some examples of how individual investors can engage in the buying of securities, as well as the selling of securities, in between the closing times of the world markets and before they open for the next business day.
Traditionally, after-hours trading has been more closely associated with any type of trading that took place after the exchanges located in the United States have closed for the business day. Prior to 1999, this type of after-hours trading tended to be limited to large scale trading conducted by trading professionals and institutional investors. An electronic trading network, often called an ECN for short, was the main process whereby after-hours trading was conducted. As a private network, access to an ECN was rigidly controlled. Individual investors had no access to any of the existing electronic trading networks and thus were not able to engage in after-hours trading without the assistance of an authorized trading entity.
However, the year 1999 saw a change in this process. Owing to the growing popularity of the Internet and access by individual investors, after-hours trading began to be common for just about anyone who wished to buy and sell stocks any time of the day or night. While individuals who wanted to conduct after hours trading still had a basic criteria to meet in order to participate, they no longer had to go through an investment firm to do so.
Today, there are several trading networks that are open to individual traders. One of the largest and better-known ECN’s is Instinet, which is operated by Reuters. The network provides and easy to use structure that allows buyers to meet sellers online and forge working relationships. A second popular option is Island ECN, which has a focus on after-hours trading but is also easily used during standard market hours. Island ECN has also applied to the Securities and Exchange Commission in the United States for recognition as a new stock exchange.
Currently, there are two other options to the use of electronic trading networks. One example is the United States exchange after-hours trading market. These are somewhat limited in the time frame where buying and selling can occur, usually limited to within a couple of hours after the markets close. Some foreign exchange after-hour markets also trade some stocks that are listed with the NYSE in the United States, and it is possible to use those avenues as a mean of buying and selling after the New York Stock Exchange has closed for the day.
More popular than ever, after-hours trading has made it possible for investors to essentially ignore the time of day and physical location when it comes to buying and selling stocks. In a world that increasingly interactive and working twenty-fours hours a day, the use of after-hours trading is certainly likely to continue to expand as time goes on.
Traditionally, after-hours trading has been more closely associated with any type of trading that took place after the exchanges located in the United States have closed for the business day. Prior to 1999, this type of after-hours trading tended to be limited to large scale trading conducted by trading professionals and institutional investors. An electronic trading network, often called an ECN for short, was the main process whereby after-hours trading was conducted. As a private network, access to an ECN was rigidly controlled. Individual investors had no access to any of the existing electronic trading networks and thus were not able to engage in after-hours trading without the assistance of an authorized trading entity.
However, the year 1999 saw a change in this process. Owing to the growing popularity of the Internet and access by individual investors, after-hours trading began to be common for just about anyone who wished to buy and sell stocks any time of the day or night. While individuals who wanted to conduct after hours trading still had a basic criteria to meet in order to participate, they no longer had to go through an investment firm to do so.
Today, there are several trading networks that are open to individual traders. One of the largest and better-known ECN’s is Instinet, which is operated by Reuters. The network provides and easy to use structure that allows buyers to meet sellers online and forge working relationships. A second popular option is Island ECN, which has a focus on after-hours trading but is also easily used during standard market hours. Island ECN has also applied to the Securities and Exchange Commission in the United States for recognition as a new stock exchange.
Currently, there are two other options to the use of electronic trading networks. One example is the United States exchange after-hours trading market. These are somewhat limited in the time frame where buying and selling can occur, usually limited to within a couple of hours after the markets close. Some foreign exchange after-hour markets also trade some stocks that are listed with the NYSE in the United States, and it is possible to use those avenues as a mean of buying and selling after the New York Stock Exchange has closed for the day.
More popular than ever, after-hours trading has made it possible for investors to essentially ignore the time of day and physical location when it comes to buying and selling stocks. In a world that increasingly interactive and working twenty-fours hours a day, the use of after-hours trading is certainly likely to continue to expand as time goes on.
Online trading
There are many major benefits to online trading. You have the ability to expand your business for a relatively low cost. Online trading has become big business, and the Internet has helped many businesses achieve a great deal of success. Internet companies such as Amazon.com and Ebay use online trading as a primary means of business and have had great success in doing so, but there have also been many businesses that have tried and failed with online trading.
The first thing to consider is whether or not your business will benefit from online trading. In recent years, there has been a tremendous amount of hype surrounding ecommerce. The hype seems to have finally calmed down, and the speculation over whether the Internet is a viable way to do business finally seems to have been established. If your business takes orders over the phone, by email or by fax, then online trading may certainly be a viable option for you.
If you have competitors who are trading online while you are still using more traditional methods, then you may certainly be losing business. Before you invest any money on online trading, ask yourself a few questions. Is the product you sell priced in a consistent manner? Do your products normally have a quick turnover, and do you already have a list of products in a sales list? If you can answer positively to these questions, then you may benefit from online trading.
Another aspect to consider is the volume of your business. You will need to consider whether your current sales will be enhanced by online trading. Look at competitors who currently trade online and see if there is scope to undercut them on products. If you intend to have larger volumes of sales, they will need to be offset against end solutions such as delivery costs.
One aspect of online trading that needs to be put into place at the beginning is an online credit payment facility. Orders can be taken via the Internet and then processed offline, but it will speed up the process to have an automatic checking and clearing facility in place. This system will tell you immediately whether credit cards are valid and funds are available to pay for your product.
Another system to consider is online stock management. This will tell you if you have enough stock in place to complete orders, or if more stock needs to be ordered. Both these systems incur costs, and they may not be viable if your margins are tight. Credit card orders also require security such as encryption. There are fairly cheap, reliable software packages that include all of these features on implementation.
Online trading is not something you should enter into lightly. You should weigh whether it is a viable option and look at the long-term prospects. The initial costs of implementing an Internet shop may be offset by the fact that you may now have customers from all over the world who are able to trade with you.
The first thing to consider is whether or not your business will benefit from online trading. In recent years, there has been a tremendous amount of hype surrounding ecommerce. The hype seems to have finally calmed down, and the speculation over whether the Internet is a viable way to do business finally seems to have been established. If your business takes orders over the phone, by email or by fax, then online trading may certainly be a viable option for you.
If you have competitors who are trading online while you are still using more traditional methods, then you may certainly be losing business. Before you invest any money on online trading, ask yourself a few questions. Is the product you sell priced in a consistent manner? Do your products normally have a quick turnover, and do you already have a list of products in a sales list? If you can answer positively to these questions, then you may benefit from online trading.
Another aspect to consider is the volume of your business. You will need to consider whether your current sales will be enhanced by online trading. Look at competitors who currently trade online and see if there is scope to undercut them on products. If you intend to have larger volumes of sales, they will need to be offset against end solutions such as delivery costs.
One aspect of online trading that needs to be put into place at the beginning is an online credit payment facility. Orders can be taken via the Internet and then processed offline, but it will speed up the process to have an automatic checking and clearing facility in place. This system will tell you immediately whether credit cards are valid and funds are available to pay for your product.
Another system to consider is online stock management. This will tell you if you have enough stock in place to complete orders, or if more stock needs to be ordered. Both these systems incur costs, and they may not be viable if your margins are tight. Credit card orders also require security such as encryption. There are fairly cheap, reliable software packages that include all of these features on implementation.
Online trading is not something you should enter into lightly. You should weigh whether it is a viable option and look at the long-term prospects. The initial costs of implementing an Internet shop may be offset by the fact that you may now have customers from all over the world who are able to trade with you.
Forex Broker
Foreign exchange trading is an attempt to make money from the relative movements of different world currencies. For instance, today one US dollar (USD) may purchase 0.7095 Euro dollars (Euros). Tomorrow, one USD is likely to buy a different amount of Euros. The change will likely be very small, but over the period of a week, the change may be significant. A week later, for example, one USD may buy 0.6995 Euros.
In the example above, if you had spent 1,000 USD to purchase 709.50 Euros, a week later you could have sold your Euros for 1,014 USD, making a nice profit of 1.4% in just one week. Most forex brokers will allow you to use leverage to increase this amount considerably. However, leverage magnifies both your gains and your losses.
A forex broker makes money from the difference between what the buyer pays for the currency and what the seller receives for the sale. This means that there is no commission on each sale; it is built in. This is very similar to the way a market maker on the NASDAQ makes money.
Very few people were aware of or involved with forex brokers and foreign exchange trade until recently. In the past, only large banks and very large corporations or investors tooke advantage of the foreign currency market. However, there are now thousands of forex brokers that allow people to open accounts and trade through the Internet. This has allowed almost anyone with an interest in trading foreign currencies to set up an account and begin trading.
A good forex broker provides both training and assistance. In principle, foreign exchange trading is as simple as buying low and selling high, not unlike the advice given to stock traders. In practice though, foreign exchange trading is much more difficult to do. For beginners, it is important to choose a forex broker who can provide training and assistance. Research on the Internet can help one locate a good forex broker.
The qualities you should look for when choosing a forex broker include a low spread, the quality of the institution associated with the forex broker, the tools and information the broker makes available to you as the trader, the software provided for making the trades, the availability of leverage options, and the length of time the broker has been in business. A low spread is important, as it is equivalent to the commission you pay on each trade. Most brokers are associated with a large financial institution or bank, and you should choose a forex broker with such an association. A good forex broker should also be registered with the Commodity Futures Trading Commission. Definitely avoid any forex broker who is not registered!
While you can guess as to which way the currency markets are going, you will have more success if your trades are based on some research and a system. A good forex broker will have the resources and tools in place to make this research easy. All foreign exchange trading is done online, so it is important that you are comfortable with the software used to do the trading. A good forex broker will have trial or demo versions available so that you can evaluate how well the system works for you before making any real trades.
Leverage is a very powerful option, so make sure that the forex broker you choose has the leverage options you need and are comfortable with. Finally, choose a forex broker who has been in business for some time and has a good reputation. Only very experienced traders should consider using a new brokerage.
In the example above, if you had spent 1,000 USD to purchase 709.50 Euros, a week later you could have sold your Euros for 1,014 USD, making a nice profit of 1.4% in just one week. Most forex brokers will allow you to use leverage to increase this amount considerably. However, leverage magnifies both your gains and your losses.
A forex broker makes money from the difference between what the buyer pays for the currency and what the seller receives for the sale. This means that there is no commission on each sale; it is built in. This is very similar to the way a market maker on the NASDAQ makes money.
Very few people were aware of or involved with forex brokers and foreign exchange trade until recently. In the past, only large banks and very large corporations or investors tooke advantage of the foreign currency market. However, there are now thousands of forex brokers that allow people to open accounts and trade through the Internet. This has allowed almost anyone with an interest in trading foreign currencies to set up an account and begin trading.
A good forex broker provides both training and assistance. In principle, foreign exchange trading is as simple as buying low and selling high, not unlike the advice given to stock traders. In practice though, foreign exchange trading is much more difficult to do. For beginners, it is important to choose a forex broker who can provide training and assistance. Research on the Internet can help one locate a good forex broker.
The qualities you should look for when choosing a forex broker include a low spread, the quality of the institution associated with the forex broker, the tools and information the broker makes available to you as the trader, the software provided for making the trades, the availability of leverage options, and the length of time the broker has been in business. A low spread is important, as it is equivalent to the commission you pay on each trade. Most brokers are associated with a large financial institution or bank, and you should choose a forex broker with such an association. A good forex broker should also be registered with the Commodity Futures Trading Commission. Definitely avoid any forex broker who is not registered!
While you can guess as to which way the currency markets are going, you will have more success if your trades are based on some research and a system. A good forex broker will have the resources and tools in place to make this research easy. All foreign exchange trading is done online, so it is important that you are comfortable with the software used to do the trading. A good forex broker will have trial or demo versions available so that you can evaluate how well the system works for you before making any real trades.
Leverage is a very powerful option, so make sure that the forex broker you choose has the leverage options you need and are comfortable with. Finally, choose a forex broker who has been in business for some time and has a good reputation. Only very experienced traders should consider using a new brokerage.
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