Online stock trading is a form of self-direct investing that allows an individual investor to partake in the buying and selling of stocks or options through the use of an internet marketplace or platform.

As a result of the rapid-pace, low-commissions, minimal fees, and overall ease of access, online stock trading has become the norm for individual traders and investors. Due to this popularity, the majority of brokers no offer online services that contain unique trading platforms to expedite online stock trading.

Benefits of Online Stock Trading:

Before online stock trading was made available, investors had to call up their hired brokers and place their particular orders over the telephone. The broker would take the order and execute the trade by placing the order into their system, which was directly linked to the coordinating trading floors and exchanges. With the advent of the Internet; however, investors are now able to execute instant trades with other investors via electronic communication networks. Although some orders entered through the Internet are still routed through the broker, the process of online stock trading is exceptionally faster than the prior technique.

The majority of online stock trading must be approved by agents who monitor the trades. This fundamental step assists in the protection of both the brokerage firm and the client from unlawful or incorrect trades.

Prior to online stock trading the fees associated with executing a trade through a tangible broker was exorbitant. The majority of online brokers are referred to as discount brokers, because the same fees associated with physical brokers are exceptionally lower when executed online. The fees attached to online stock trading are lower due to the speed in which the trade is executed (exponentially more trades can be executed) and online stock trading does not deliver investing advice that is commonplace with a generic broker.

Risks Associated with Online Stock Trading

Before you choose to invest or take part in online stock trading, it is essential that you adequately research the online broker that is being utilized. You must assure that the online broker is licensed with the coordinating state or provincial jurisdiction in which the online stock trades are executed.

The Federal Government of the United States provides tips to avoid investment scams through the issuance of their On Guard Online website.

Potential investors must also understand the potential risk of investing without the aid of a licensed and trained Stock Broker or Investment Professional. These individuals are well-versed in trading and understand the compliance issues associated with investments. Forgoing this information and knowledge could prove costly. As a result of this, the majority of online stock trading companies or online brokers will offer a number of investment tools that may be utilized by individuals.

Once you have researched the aforementioned information, you must research the particular sectors and the coordinating business and financial statements of each company whose stock you plan on purchasing. This knowledge, along with a diversified investment strategy will assist in mitigating the risks associated with the volatility of the stock market and the general risks associated with online stock trading.

The OTC Bulletin Board is an electronic, interdealer quotation system that displays real-time quotes, volume information for over-the-counter equity securities (those securities not listed on the NASDAQ or a national securities exchange), and last-sale prices for many equity-securities in the United States.

The OTC Bulletin Board is a service delivered to broker-dealers who may subscribe to the system for a yearly fee. Once the service is acquired, a broker-dealer or financial institution can effectively look up prices or enter quotes for OTC securities.

The Financial Industry Regulatory Authority is the administrative and authoritative body responsible for running and overseeing the OTCBB. That being said, FINRA announced in September of 2009 that the agency would be selling the OTCBB. The sale was initiated because competitors—like the Pink OTC Markets who are rumored to purchase the OTCBB—are stripping the OTCBB of its listing powers. Prior to 2008, the OTCBB collected 100% of quotes, but this number has declined due to the rise in competition.

The OTCBB is not part of the NASDAQ stock exchange; however, all companies quoted or listed on the OTCBB must satisfy the filing and full reporting requirements of the SEC. Although regulations exist, the companies listed on the OTCBB possess no responsibility to report specifics associated with a market capitalization, a minimum share price, and corporate governance. That being said, companies may be “de-listed” from the OTCBB for falling below a minimum share price, a minimum capitalization or other requirements that end up being quoted on the OTCBB.

Those stocks not listed or quoted on the OTCBB (stock of non-reporting companies that do not possess current SEC filings) may be quoted in the Pink Sheets. The majority of companies listed on the OTCBB are dually quoted, meaning they are listed on both the OTCBB and the Pink Sheets.

The OTCBB is an electronic trading service offered by the National Association of Securities Dealers. Companies listed on the OTCBB are required to file current financial statements with either the SEC or a banking/insurance regulator.

Those stocks traded in OTC markets (such as the Pink Sheets or the OTCBB) typically possess minimal market capitalization.

Stocks traded and quoted on the OTCBB possess low trade volumes and are typically classified as microcaps or penny stocks. As a result of this classification, the majority of retail and institutional investors will avoid the stocks listed on the OTCBB due to the risks associated with share price manipulation and the greater potential for fraud.

Due to the aforementioned risks, the Securities and Exchange Commission commonly issues warnings to investors to be aware of manipulation and fraud schemes associated with the companies listed on the OTCBB. As a result of this investor skepticism, most companies will seek listing on more established marketplaces such as the NYSE, AMEX, or NASDAQ.

Global finance refers to the financial system consisting of regulators and various financial institutions that conduct their business on an international level. As a result of this definition, global finance does not constitute any financial businesses or regulators that act on a national or regional level.

The primary components of global finance are the enormous international institutions, such as the bank for International Settlements or the International monetary Fund, as well as various national agencies and government departments, such as various central banks, finance ministries, and those private companies who act on a global scale.

The International Monetary Fund is a financial institution that is responsible for maintaining the international balance of payments accounts of its member states. The International Monetary Fund may also act as a lender (typically in last resort situations) for state members who are in financial distress due to currency crises or struggles that revolve around meeting the balance of payment when debt default is present.

Membership in the International Monetary Fund is based on quota or the amount of funding a member state (country) provides to the fund. The evaluation of funding is based on a relative investigation of the member state’s role in the international trading system and global finance in general.

Another prominent member of global finance is the World Bank, which is an institution who aims to offer funding for development projects that, for the most part, reside in developing nations. The World Bank assumes the credit risk of these developing nations; the World Bank will provide financing to projects that otherwise would not be able to access such funding.

The World Trade Organization is another principle player aligned with global finance. The World Trade Organization is responsible for settling disputes and negotiating international trade agreements with various international companies, institutions or government agencies.

To be considered a participant in global finance a company or organization must possess international clients or conduct business transactions overseas. The following types of institutions also play a prominent role within global finance:

o    Commercial Banks

o    Insurance Companies

o    Sovereign Wealth Funds

o    Mutual Funds

o    Pension Funds

o    Private Equity Firms and Hedge Funds

The International Finance Corporation is a United Nations agency that directly invests in companies and guarantees loans to private investors in the global marketplace. The International Finance Corporation is affiliated with the World Bank and was created to promote a sustainable private sector through the investment in developing economies as a means to reduce poverty and improve the lives of those residing in struggling nations.

The funds delivered to such nations are typically used to benefit the nation as a whole. Through the delivery of funds, these developing economies can invest and subsequently supply their people with improved public services such as paved roads, public transportation, the establishment of business centers, and an overall improvement of the nation’s infrastructure.

The International Finance Corporation is headquartered in Washington D.C. and shares the primary responsibilities and objectives of all World Bank Group Institutions—to improve the overall quality of the lives of people in developing countries.

To help those in struggling nations, the International Finance Corporation provides micro loans as well as other forms of financing to developing countries. The International Finance Corporation was established in 1956, and stands alone as the world’s largest multilateral source of equity financing for private sector projects in developing economies worldwide.

The International Finance Corporation aims to promote sustainable development of the private sector in developing nations through the various means:

o    The International Finance Corporation will finance private sector projects and an assortment of business ventures in the developing world.

o    The International Finance Corporation will help private companies in developing nations in regards to mobilizing and gaining access to financing streams in the international financial markets.

o    The International Finance Corporation will provide technical assistance and professional advice to various businesses and government agencies throughout the world. 

The International Finance Corporation is comprised of 182 member countries who band together to collectively distribute the company’s unique policies. To gain membership, a country must first acquire membership to the International Bank for Reconstruction and Development. The International Finance Corporation shares capital, which is delivered by its member countries. The voting privileges of the member countries are proportional to the number of shares held—tied-into the amount invested.

The International Finance Corporation is comprised of a Board of Governors who delegates the majority of their powers to the IFC’s board of Directors. The IFC is also managed by the company’s CEO, President and Executive Vice President.
International Finance Corporation’s funding:

The International Finance Corporation’s equity and investment policy is funded out of the capital paid-into the corporation. Additionally, funds are obtained through the retained earnings, which is primarily comprised of the corporation’s net worth. The IFC possesses a strong shareholder support, triple-A bond ratings, as well as a substantial capital base, which allows the company to raise funds in all international markets.

Those individuals with higher credit scores will be awarded with a lower APR. The lower APR is awarded to an individual with a higher credit score because of the mitigated risk of default—the issuer of the card views the individual as a safe investment and therefore grants the individual with the ability to possess 0 APR credit cards or credit cards with low APRs. The variables that calculate the APR can fluctuate upwards to 50%, meaning some cards may carry an APR of 50% while others may have an APR of 0.

The APR is only attached to the remaining balance of a credit card. If the individual fails to pay the complete balance owed and opts instead to pay the minimum balance, the APR will be attached to the remaining balance and then carried over to the following month.

What is a 0 APR Credit Card?

When an individual applies for 0 APR credit cards they are looking to obtain a credit line where the attached annual percentage rate is zero. As a result of the 0% APR, the individual can save a substantial amount even if he or she makes minimum payments. That being said, the majority of new credit cards are issued with a fixed timeframe of 0 APR. These cards are used to entice borrowers who are looking to lock-in 0 APR credit cards regardless of the timeframe.

Those lenders that issue 0 APR credit cards for a fixed timeframe typically do so for the borrower’s first year of use. After this time, the APR is adjusted based on the individual’s credit history and finances and is then attached to the remaining balance (if applicable) of the card.

A car loan amortization is a fundamental means to finance the purchase of an automobile. In the simplest of terms, a car loan amortization is a type of loan used to purchase an automobile. Dissimilar to a lease, a car loan amortization is financing–given by the lender to the borrower or purchaser of the automobile—that is paid off through fixed-periodic payments used to diminish the interest attached to the loan as well as the overall principal or loan amount.

In regards to economics, amortization refers to the distribution of a single lump-sum cash flow into many smaller cash flow payments or installments, as determined through an amortization table or schedule.

A car loan amortization contains a repayment structure that is held separate from a standard loan. Typically, a car loan amortization possesses a longer maturity schedule where both interest and the principal require repayment. Unlike other repayment models, each repayment in an amortization consists of satisfying both the principal balance and the interest attached to the loan.

Amortization is primarily used in loan repayments, most commonly in mortgage loans or sinking funds. The payments are divided into equal amounts for the duration of the maturity schedule. As a result of this uniformity, the amortization is regarded as the simplest repayment model. That being said, a larger amount of the payment towards the amortization is applied to the interest of the loan at the beginning of the amortization schedule, while more money is used to satisfy the principal at the end of the amortization loan.

In an accounting sense, loan amortization refers to expensing the cost of acquisition from the residual value of intangible assets such as patents, trademarks, copyrights or other forms of intellectual property.

In a more common sense, amortization refers to the tangible process of paying off a debt, such as a loan or a mortgage. The process in a loan amortization is satisfied through the delivery of regular payments made at uniform times. A portion of each payment is used to satisfy the interest while the remaining payment amount is applied towards the principal balance. The percentage that goes into satisfying both the interest and the principal balance is determined through the amortization schedule.

A car loan amortization is deciphered by the macro-economic conditions of the market (primarily the interest rates) the credit score of the borrower, and the intricacies that revolve around the specific car loan amortization. Typically, those individuals with good credit scores will be awarded with lower interest rates and vice versa.

Additionally, the cost of the car and the economic health of the underlying dealership or manufacturer will factor into the terms of the specific car amortization loan. To view a particular amortization schedule a borrower (either an entity or an individual) can observe the specifics of their repayment plan by inputting various components within an amortization calculator. Once the information has been satisfied an individual will be able to view the dates, amounts, and effects of each of their periodic payments and those payments relate towards to the repayment obligation of their particular loan.

A liquid asset is any financial resource that can quickly be converted to cash. Liquid assets are a basic form of asset used by investors, suppliers, and consumers.

In addition to a quick conversion to cash, a liquid asset can be regarded as cash itself, or any negotiable asset that can be transferred or accepted as cash. In most instances, financial professional or experts will classify an asset as “liquid” if the good can be converted into cash within a period of 20 days.

Coins and currency are the most fundamental forms of liquid assets. The liquidity of such assets stems from the fact that both coins and currency are immediately recognized as legal tender for purchases and used to diminish outstanding debts. The circulation of such liquid assets is controlled by an authoritative power (typically a treasury department of a central government) to maintain a suitable money supply as to effectively control inflation and the overall prices of goods.

Holders of capital assets or investments will aim to maximize their liquidity. Those who do not possess liquidity may fall victim to missed opportunities (in regards to potential profits through investment), fluctuating rates of inflation or interest rates, as well as mounting debts.

In addition to currency, there are several examples of liquid assets that are used by both businesses and private consumers or investors. For instance, monies deposited into a checking or savings account are considered to be liquid assets, since the funds are readily accessible and can be used to settle or repay debts. Through the advent of debit cards, consumers, investors and businesses have greater access to liquidity; prior to the creation of debit cards, liquidity relied on an individual travelling to a bank to withdraw his or her funds.

Along with savings or checking accounts, money market funds, bonds, mutual funds, and the cash value found in a life insurance policy are all examples of interest bearing investments that may undergo a liquidation process to provide cash when necessary. Although the actual liquidity of each investment or asset type may vary, the key characteristics in regards to liquidity is the length of time that such assets can be converted into cash. By selling the aforementioned assets, the former owner has the ability to obtain cash in a fairly quick and simple process.

In regards to economics, amortization refers to the distribution of a single lump-sum cash flow into many smaller installments, as determined through an amortization table or schedule. 

Amortization is a loan with a unique repayment structure. Unlike other models, each repayment in an amortization consists of satisfying both the principal balance and the interest attached to the loan. 

Amortization is used in loan repayments, most commonly in mortgage loans or sinking funds. The payments are divided into equal amounts for the duration of the maturity schedule. Because of this uniformity, the amortization is regarded as the simplest repayment model. 

Payment towards the amortization is mostly applied to the interest of the loan at the beginning of the amortization schedule, while an increased percentage of payment is used to satisfy the principal at the end of the amortization loan.

In an accounting sense, loan amortization refers to expensing the cost of acquisition from the residual value of intangible assets such as patents, trademarks, copyrights or other forms of intellectual property.

In a more common sense, amortization refers to the tangible process of paying off a debt, such as a loan or a mortgage. The process in a loan amortization is satisfied through the delivery of regular payments made at uniform times. A portion of each payment is used to satisfy the interest while the remaining payment amount is applied towards the principal balance. The percentage that goes into satisfying both the interest and the principal balance is determined through the amortization schedule. 

Loan amortization schedules are deciphered by the macro-economic conditions of the market, (primarily the interest rates) the credit score of the borrower and the intricacies that revolve around the specific loan. 

A lender will amortize a loan to pay-off the outstanding balance through the delivery of equal payments on a regular schedule. These payments are structured so that the borrower satisfies both the principal and interest with the delivery of each equal payment. 

Payments and amortization calculators are available on a number of lending websites; these tools facilitate the construction of an amortization schedule. If the lender wishes to understand the variable and inner-workings of the amortization calculation, please observe the below figures and steps:

• P= Principal amount (the initial amount of the loan)

• I= The annual interest rate (a figure from 1 to 100 percent)

• L= The length in years of the loan or the loan over which the loan is amortized

• J= The monthly interest 

• N= The number of months over which a loan is amortized

To calculate the amortization, first take 1+J then take that figure to the minus N power. Take this number; subtract that figure from the number 1. Next, take the inverse of that and multiply the result by J then P. This figure represents the monthly payment (M). To calculate the amortization table you will need to do the following:

Step 1: Calculate H (P X J) to observe the current monthly interest rate. 

Step 2: Calculate C= M-H to observe the monthly payment minus the monthly interest rates—this figure is the principal amount for that particular month.

Step 3: Calculate Q=P-C to observe the new principal balance for the loan.

Step 4: Set P equal to Q and observe Step 1 until the value of Q goes to zero.