Electronic trading

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Electronic trading is a mode of trading that uses information technology to bring together a buyer and a seller through electronic media to create a virtual market place. Markets such as the new age stock exchanges are a prime example for such and electronic market place.

Historically stock markets used to be a physical location where buyers and sellers met and negotiated. However with the improvement in communications technology, the need for a physical location no longer is of any importance as the buyers and sellers can electronically exchange indications of interests as well as negotiate from a remote location.

Not only are there markets in tune with the current developments in information technology, but are also easy to monitor and manage. These are major drivers for most market regulators to insist that the markets must be developed electronically.

NASDAQ, set up in 1971, was the world's first electronic stock market.

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