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New Options for Global Trading in Stocks (Part 1)

23 October 2007 - Features - Editor

The facility to buy and sell stocks from the privacy and convenience of a computer screen, at any time of day or night, has changed the stock market structure for ever. Entire swathes of jobs and services have been rendered null and void, while new technologies and advisory services have been born. The inter-relationships between hardware, software, and financial services may be entirely symbiotic, but new trading options for stocks are common denominators of revolutionary changes in the public ownership of companies that work for profits. Most of the ideological opposition to private enterprise and to western capitalism dissolves when one considers the generous individual freedoms provided by screen-based trading options.

Online trading in stocks has evolved at a time when major economies have enjoyed relative upswings. The last sustained bear phase occurred during the days of people scurrying around on trading floors and rings. Time zones between Japan at one end and the United States on the other continue to have some effects on daily fluctuations of stocks, though quotes on computer screens have delays of just minutes, thanks to the latest software. Business channels on television have also neutralized many information monopolies of the past with respect to stocks, and helped to bring untold numbers of home makers and other categories of ordinary citizens in to trading circles. However, the world is yet to be reassured that all these stake holders of screen-based trading in stocks will be able to endure a possible future economic depression.

Why Stocks in Other Countries Are Attractive

It is unfortunate that most Exchanges and national regulators have dragged their feet in terms of allowing lay investors to buy and sell stocks in other countries. National security and currencies issues are genuine hurdles in the way of truly liberated global investing in stocks. No country would like funds from terrorists or from drug cartels to sully their economies. There is strong polarization on the extremes of letting free markets determine relative currency values, and the manner in which the Chinese regime administers the RMB. Some countries, notably India have antiquated restrictions on the freedoms of citizens to hold foreign currencies. These are some of the major hurdles which prevent online trading systems for stocks from operating across national borders.

The many reasons to prevent cross-border trading in stocks by individuals do not detract from the greenness of the financial grass on far sides of national fences. Country GDP growths and base dimensions vary tantalizingly. Investors from poor nations lick their chops at the prospects of dividends in dollars and Euros, while their counterparts in mature economies have fantasies of rising above stagnating prospects for growth. Some nations focus on agriculture, attracting commodity traders, while others emphasize certain sectors such as civilian aircraft manufacturing, which are of special interests for sector experts. Some investors may like to trade in stocks from other countries, purely out of interests in their cultures and people. It is easier to underline the global demand for international trading in stocks than to enlist all the underlying reasons!

New Options for Global Trading in Stocks (Part 2)

 


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