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A stock exchange is market where the stocks, shares and other such securities are bought and sold. In a conventional stock exchange there are brokers who trade the stocks at the trading floor by shouting the bid price and ask price for particular stocks. Online stock is exchange is also a place where stocks are bought and sold but here the trading is done electronically and not on the trading floor. In fact for the online stock exchanges there is no physical location for the exchange at all. The transactions take place over the network of computers. NASDAQ which is the first electronic and online stock exchange is the most well known amongst the online stock exchanges all over the world.
The process of the trading is in online stock exchanges is the same as the conventional stock exchanges. Here also the seller of the stocks asks for a price to sell off the stock and the buyer bids for stock at a particular stock. The broker works as an intermediate platform to close the deal. In case of online stock exchanges the bids are given in the form of instructions from the buyers and seller through an electronic medium, which is internet in most cases at present. According to the regulations it is mandatory for the book makers of the exchange to honor these trading requests of the buyers and sellers over the online medium.
Though some may argue that the excitement of the trading floor is missing in online trading, it is in fact more convenient for the common investors. The biggest advantage of the online stock exchange is that, you can trade at the exchange from any part of the country and even from abroad and that too in a convenient way. You need not be physically present at the exchange or call your broker every time you need to buy or sell the stocks and you are able to do the trading on real time.
As there is no middle and or broker directly involved in the process, the process is much more transparent and trustworthy. It takes no paper work and with online trading at the exchanges you have all the required information readily available to you round the clock. With online stock exchange at place the common investors can also do the trading on regular basis even after attending their other commitments and works.
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