How much involvement can an acutal brokerage have with on line stock trading and investing?

Question

Who will be making these trades , you or the broker? (legally if you trade on line , via a website, you are asking that an order be placed or sold) so is it technically you doing it or the broker?)

If you trade on line do you have to contact the broker to help you make the trade or can you just do it from the website ?

Answer 1

Hey Windy,

Brokers are the ones that are licensed to enter trades in the stock market.  So, to have a buy or sell order executed at the exchange, you'd have to be a licensed broker.

However, brokers are allowed to have clients (like you) and when they have clients, their license requires them to follow their clients' instructions if the broker acts on the client's behalf.

So, if you have a broker (even a discount broker like Scotttrade or Charles Schwab...) and you instruct them to sell 100 shares of XYZ at $10 a share, they are obligated to follow those instructions - they do not have a ability to change them because they want to...

So, technically, when you make a trade, you are giving instructions to a broker, who is acting on your behalf, and must follow your instructions.  

When you submit a trade through a website, you are effectively giving your instructions to the broker, who then acts on your behalf to follow them (they end up doing a lot of this electronically, so there may not be a person "in the loop"...)

Hope this helps, and good luck!

Answer 2

Skip thinking of the website as any different in nature than a phone call or face to face meeting with broker.  If you issue an order online you are giving instructions to your broker as to how to behave.  In some circumstances they can refuse to allow an online trade.  Your broker is attempting to follow your instructions, they are your agent.  If you place a market sell order on a NYSE stock then you are instructing them to send a floor broker to the trading post and continue to bid until you are the low bidder on the floor to sell it.  They make the trades, but do so on your instructions.  They can require you to phone in or even provide written, Medallion guaranteed, instructions.

Answer 3

when you enter orders on-line, your order will go through many edits, then it will be routed to the market or a firm assigned by the brokerage firm for execution.  There is no individuals involved in this order entry process, the only time an individual may enter into it is on the floor of the exchange or a market maker in the OTC market.

When you trade on-line you do not have a broker there to help you, everything is done electronically.  If you do need help most firms provide customer service type of assistance for you,