We live in a world where technology touches all areas of our financial lives, from wealth management to banking, investment to insurance and beyond. While FinTech covers the broader financial technology sector, subsectors are now emerging, such as WealthTech and RegTech, to name but two. Focusing on WealthTech, what are the long-term benefits and how does this enhance wealth?
We have seen considerable developments in online tradingtechnology over the last 20 years. As an online trader, dealing from the comfort of your home, the markets and the investment options available today have never been broader. There are five basic stock trading strategies used by many online traders, often adapted for their particular goals.
As an online trader, it is essential to appreciate the importance of psychology in online trading. There is nothing wrong with feeling various emotions as you are trading; indeed, as an online trader, they can be helpful, but they must not rule your head. We will now look at the challenges of online trading in relation to psychology and how to remain in control.
While the term short selling is often associated with day traders and professional traders, seen as a means of speculating, there is a lot more to this activity. The term short selling relates to the practice of borrowing a security, selling into the market with the expectation of buying back lower down. We will cover some variations in a moment, but this best describes short selling in a nutshell.
During your time as a day trader/asset management client, you will undoubtedly have come across the term beta. This is a term used to represent the volatility between, for example, individual stocks and a stock market. While often associated with short-term trading, it is also essential to recognise the value of beta from an asset management point of view.
The Internet has brought online trading to the masses, prompting a vast increase in the number of day traders. However, access to real-time information has also impacted the number of people adopting alternative investment strategies. So, how many different types of investment trader are there?
The world of wealth management is, in theory, relatively straightforward, but in practice, there are several challenges. For example, in the UK, we recently saw the Autumn Budget announcement, which impacted an array of areas that have previously remained relatively untouched. Consequently, the subject of wealth management and asset management has very much come to the fore.
Whether looking at clearing services in isolation or as part of more comprehensive clearing and custody services, investors should be aware of their importance. Since stock markets were opened up to the broader public, traders, and long-term investors, many of us give little consideration to clearing and custody services. However, they are at the heart of any investment market!
Many will have heard of the CREST stock settlement system which is an acronym for Certificateless Registry for Electronic Share Transfer. While we often take this stock settlement/clearing service for granted, it has played an integral role in the settlement, clearing and custody of various stocks and investment instruments. Before we look at CREST Depository Interests, it is important to note that CREST is not a monetary clearing service, but one of the best-known stock settlement/clearing services.
Unless you have delved into how trading networks operate, it is unlikely that you will have come across the term low latency execution. This is especially important in this day and age, with a significant increase in high-frequency trading. In addition, the introduction of trading bots, artificial intelligence, and other automated trading services means that speed is even more critical. During the modern-day trading environment, every nanosecond or microsecond counts!