How Technology is Affecting the Financial Markets.

 

Technology is shaping many different areas of the world, it is speeding up manufacturing, improving our quality of life, making many aspects of life more efficient and effective. One area that has been revolutionized by the advances of technology itself is the financial markets and the stock market. There are several ways how technology has changed and shaped the current state of the markets, and also the future direction. Firstly, ease of use, through technology it is now easier than ever to trade on the stock market, secondly speed, making transactions is faster than ever, and finally depth of information.
Ease of Use

 

 

Apps Like Robinhood

Apps like RobinHood Trading has made it easier than ever to access stock market trading. By being a technology driven brokerage they are able to operate with substantially less overheads seeing a significant reduction in fees. These fees often make casual traders be turned off the idea of the stock market, as low amounts they want to invest will not be worthwhile after paying the various fees to most companies. This has seen a new type of trader, with a lower amount of wealth be able to effectively utilize the markets.
Additionally since it is an app that is available on smartphones, it allows for people to trade anytime and anywhere. This means people are a lot less restricted in trading, and may encourage more people to trade as it is easier than ever. This unrestricted method opens up a wide range of possibilities, and overtime, may influence the way trades are conducted.
Also there are several different types of software and websites that offers free trading. Effectively allowing you to play with “pretend” money to give you a learning experience. This is simpler than ever to use and can easily help you track investments and give you a good immersive experience before risking your own money.
Speed of transactions.

The speed of transactions are now faster than ever. Traditionally trades were done by shouting from one human to another, then through telephones and now the internet. With faster transactions more trades are occurring, and when market changes are occurring, investors can react as quicker than ever. Quicker reaction to new information will mean the markets are constantly changing faster than ever.
Depth and Availability of Information.

Due to the rise of the internet the availability of information allowing people to make an informed decision is easier than ever. Instead of relying on other people’s recommendations and analysis it is extremely easy to access company reports and see for yourself whether or not it would be a good investment. The information is now more in-depth as well, as technology is able to perform complicated algorithms to analyse company data to allow you to form a more educated opinion. Many companies provide real time data on the stock markets, allowing you to see completely up to date information and see the start of any potential trends allowing you to capitalise and take advantage of the changing market.

NEW YORK, NY – JUNE 21: ING Groep N.V. CEO Jan Hommen rings the opening bell at the New York Stock Exchange on June 21, 2012 in New York City. (Photo by Ben Hider/NYSE Euronext)

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