In short, day trading is a process in which stock positions are directly opened or closed with world-renowned stock exchanges, and this is done usually through a computer to access an Internet broker from the comfort of one's home, or through a work computer located at a branch office. The keyword in this definition is direct. A day trader would thus have direct computerized access to specialists from the New York Stock Exchange (NYSE) and/or a NASDAQ Market Maker.
In this case, the market makers would be NASD dealers and brokers, who trade NASDAQ stocks for other individuals or business entities, and involve themselves in securities to abet them in handling their proprietary accounts. These market makers are essentially stock merchants by trade. One NASDAQ stock will have many market makers who are continuously trading in that stock and thus making a market for that stock. Each NYSE stock, on the other hand, only has one assigned specialist.
The NYSE specialist will be tasked to make sure that each stock maintains a market that is impartial and well-organized. Specialists have dual-pronged responsibilities - they can either work on their own behalf as a dealer, thus acting in a sovereign capacity when handling their own accounts, or working on other securities brokers' behalf as a broker, commencing whatever orders they may have. In sporadic occasions, the specialist will take the principal role in order to sustain the marketability of the stock, or stocks, and to neutralize whatever inequities there may be in the supply and demand of that security.
Stockbrokers are not necessary in the world of a day trader. The broker is superfluous in this case as the trader does not reach him/her via phone, and on his/her end, the broker has no need to relay an order to his/her firm's order desk. The clerk is not routing that order to the market maker. Such is the convenience of day trading firms. Day trading firms, as a result of all this, do not encounter the ubiquitous time delays and costs in conjecture to the use of middlemen that other firms may encounter when processing orders. So as you can see, day traders do not spend much time or money by acting as their own brokers.
The day trader can do it all with a few simple keystrokes - he or she can enter the stock symbol on his/her special trade processing software, hit a function key and boom - buy or sell a share or two with little to no effort. The software used in day trading enables the day trader and the major stock exchanges to communicate effectively and efficiently with each other, and is generally easy to operate.
In this case, the market makers would be NASD dealers and brokers, who trade NASDAQ stocks for other individuals or business entities, and involve themselves in securities to abet them in handling their proprietary accounts. These market makers are essentially stock merchants by trade. One NASDAQ stock will have many market makers who are continuously trading in that stock and thus making a market for that stock. Each NYSE stock, on the other hand, only has one assigned specialist.
The NYSE specialist will be tasked to make sure that each stock maintains a market that is impartial and well-organized. Specialists have dual-pronged responsibilities - they can either work on their own behalf as a dealer, thus acting in a sovereign capacity when handling their own accounts, or working on other securities brokers' behalf as a broker, commencing whatever orders they may have. In sporadic occasions, the specialist will take the principal role in order to sustain the marketability of the stock, or stocks, and to neutralize whatever inequities there may be in the supply and demand of that security.
Stockbrokers are not necessary in the world of a day trader. The broker is superfluous in this case as the trader does not reach him/her via phone, and on his/her end, the broker has no need to relay an order to his/her firm's order desk. The clerk is not routing that order to the market maker. Such is the convenience of day trading firms. Day trading firms, as a result of all this, do not encounter the ubiquitous time delays and costs in conjecture to the use of middlemen that other firms may encounter when processing orders. So as you can see, day traders do not spend much time or money by acting as their own brokers.
The day trader can do it all with a few simple keystrokes - he or she can enter the stock symbol on his/her special trade processing software, hit a function key and boom - buy or sell a share or two with little to no effort. The software used in day trading enables the day trader and the major stock exchanges to communicate effectively and efficiently with each other, and is generally easy to operate.
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