Example: According to the New York Times, one investor tried to buy red-hot Internet stock theGlobe.com on one of its dizzying upswings. He clicked "buy" hoping for $15 to $25 -- and got the stock at $90 after getting trampled by professional traders. What he may not have known: Most online trading still takes place 20 minutes behind the markets -- an eternity in Street time. What he should have done: place a "limit" on the order -- a contingency that cancels the order if the price rises to a given level before the trade is executed. Even real-time trading, which has recently become available online, is no guarantee that what you see onscreen is what you'll get by the time the order goes through. Moral: If you want to invest, doing it online can save you money. If you're going to try to outsmart the pros, bring lots of cash.
Online Trading: A Dangerous Game
-
Share
-
Read Later
-
NEW YORK: Online trading is more popular than ever -- it now accounts for 25 percent of all retail investing -- but a record number of do-it-yourself types are also logging off without their
shirts. The Securities and Exchange Commission reported Wednesday that
complaints from online investors quadrupled in 1998, to 1,114. Some of those
are the fault of online brokerages ambushed by snowballing demand; most seem
to be the fault of homebodies who imagine that the Internet puts them right
on the trading floor -- and have no idea how the markets really work.