Today's Market Players: A User's Guide
It's a brave new world for investors. The days of shares "changing hands' are long gone. Now it is man and machine, and sometimes, man versus machine. Trading is super fast, simple and cheap.
Daily stock trading volume has exploded four-fold in the last decade and often tops 8 billion shares a day.
Meanwhile, the market has become fragmented, increasing volatility and decreasing liquidity. Regulators have struggled to keep up, leaving the system rickety and unwieldy.
The average investor has little idea about how trading works and the players and technologies involved along the way. In some case, its a long, strange trip from point A to point B and it's not always the most direct, efficient or fair way to go.
Click ahead to learn about the world of financial trading.
People of all incomes and occupations play the stock market to varying degrees, and they all either use an Internet trading platform or work directly with a person at a brokerage firm.
They have some tough competition in the form of asset managers, licensed, tainted MBA types who manage mutual funds, pension funds and investment accounts.
And then there are the professional traders. They typically work for hedge funds, banks and Wall Street firms and represent high net-worth individuals. In recent years, more of this has been done for firms' proprietary trading desks that make money on trading profits rather than commissions.