Online trading for companies

Whether you are a small building company or a multinational industrial chemicals conglomerate, the chances are that you have to deal with the financial markets on occasion. You may run your own pension scheme in-house, which necessitates the buying and selling of securities from time to time or you may sell products to foreign clients or purchase raw materials from abroad, and need to hedge against moves in the currency markets. Not so many years ago you would have had no choice other than to conduct these transactions through your company’s local bank. Fees were higher, and unless you were dealing in very large sizes, you often had to wait several hours for your deal to be completed. Nowadays things are of course a lot different. Banks are more efficient, and there are a number of other options open to you as well.

One of these options is online trading with a broker that specialises in dealing with customers over the internet. There are many brokers to choose from; some concentrate on one particular area such as currencies, whereas others offer a whole range of products – commodity and currency futures, options, shares and spot foreign exchange, all under the one roof. For the more sophisticated investor, such as those running a small pension fund perhaps, some brokers will provide software with more advanced features. Algorithmic trading – where the program will use complex algorithms to work out such things as the best way and time to place large orders without moving the price too much before you have completed your business – is one such feature. Another is the ability to put together batch orders. These can be made up, not only of shares in multiple companies, but of different financial instruments as well. You can define a batch order and then execute it later with just one click. There are also various different facilities to trade multiple accounts at the same time, interface with prime brokers, and in some cases, choose which exchange you wish to send an order to.

Online trading has developed into a very sophisticated sector of the financial markets, and is certainly not the preserve of enthusiastic amateurs. There are many different types of trading software, ass there are many different types of broker. Some brokers use third party software, such as MetaTrader or TradeStation, whereas others use their own proprietary software. Still others use a web interface so you can log in from any machine, anywhere in the world. With all of these types of trading software, streaming prices are available, enabling you to follow market moves as they unfold in real time. With the wide choice of brokers available, you should be able to find one that suits your company’s needs. Make sure that they are a member of a respected regulatory organisation before opening an account for online trading, and check whether any money you lodge with them will be held in a segregated account, giving you added protection in the event they experience difficulties.