To buy and sell securities online, you set up an account with an online brokerage firm.
The firm executes your orders and confirms them electronically. When the markets are open, the turnaround may be very fast, but you can also give buy or sell orders at any time for execution when the markets open.
You may mail the firm checks to settle your transactions or transfer money electronically from your bank account.
Some online firms are divisions of traditional brokerage firms, while others operate exclusively in cyberspace. Most of them charge much smaller trading commissions than conventional firms.
Online firms usually provide extensive investment information, including regularly updated market news, on their websites, though not one-on-one consultations.
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- Brokerage account, Brokerage firm, Brokerage window, Commission, Deep discount brokerage firm, Discount brokerage firm, Full-service brokerage firm, Internalization, Online trading, Sell side, Soft dollars
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