Level 2 Share Trading

Level 2 is a very useful share trading and investing tool because it offers you live streaming of the order book of any share you wish to view. So with this information you can tell how many buyers and sellers are sitting on the order book ready to buy or sell a particular share. So how is this information useful to you?Well for a start you can quickly and easily see where the share price is likely to move in the near future. There's no guarantees but the general rule is that the more buyers that are placing orders directly onto the order book of a share, the more likely it is that the share price will move up, and vice versa.It is basically a snapshot of demand and supply. For instance if total orders on the buy side (ie the left hand side) are equal to 200,000 shares and there are just 10,000 in total on the sell side then you would justifiably expect the share price to move up in the near future.Unfortunately although Level 2 is a great tool, it's not necessarily as easy to make profits as it may seem. You just have to spend a day or so watching the Level 2 screen for a particular stock to see all kinds of games being played.Anyone with direct market access can now place trades directly onto the order book so this means that you will often see people entering and deleting orders to distort the order book. For example people will often place large orders just far enough from the current price so that it's in no danger of being triggered. So if this order was on the sell side of the order book, people viewing Level 2 would automatically see the big seller and therefore would be inclined to go short themselves. However if the price rises and threatens to take out this order, the person will suddenly remove the order and the price will continue rising and the traders will have been caught out.Another common occurrence on Level 2 is iceberg orders. This is where people automatically place a new order every time one of their orders is triggered, and is a good way of filling a large order because people don't notice lots of smaller orders.Finally there's the problem of market makers. They play all kinds of games with investors, and have a lot of influence on the share price, particularly with smaller shares. It's not uncommon for market makers to suddenly raise or drop their orders on the order book to either shake weak holders out, or to encourage them to buy more shares from them.So overall although Level 2 is a useful tool, it's not necessarily a foolproof method of making money. It's useful for showing demand and supply at any one time for a particular share, but this information can also be misleading as well.

Market Penetration Pricing - A Quick Market Entry Pricing Strategy

Market penetration pricing is a quick-entry price strategy that assumes low price will gain high sales volume which, in turn, will result in lowering costs. This strategy is used in price sensitive markets. For example, consider the market for DVD players; it is a high volume market, it has a high number of competitors, the costs to produce DVD players have fallen, and new and/or changing technology allow businesses to rapidly introduce new features and benefits on new models. The businesses that introduce DVD players quickly, sell high volume at low or reasonable prices, are following a market penetration strategy.Businesses using market penetration pricing are usually trying to penetrate the market by growing their share of the market. They assume that the lowest price will win market share. Make sure that if you use this pricing strategy that you test your market, your price sensitivity and your price elasticity or in-elasticity first. Also be sure to do your market research to gain an understanding of how your competitors will react to this penetration pricing strategy. For example, your low price may cause your competition to lower price, then you will lower your price again, and so on - no one wins with a strategy like this.But your market penetration pricing strategy can also be a deterrent for new competitors who are considering entering the market. When they see how low your pricing is and realize that their margins will be low and the risk of gaining market share for new entrants is high, they might choose not to enter the market. For your business to be successful with this strategy, it must have the capability to enjoy the economies of scale that high volume will bring and be the low cost provider in the market.If you are an existing business and your competitor is following a market penetration strategy, do a thorough market research assessment of your capabilities:Can you drive your costs down?Can you produce high volume?Do you want to sell your product at a low price (and hope volume sales will get you both the market share and the profitability you want)?If you answer no to any of these questions, don't follow this penetration strategy (or at least, consider this strategy very carefully). However, if you are a new business considering this strategy in a new, or scarcely populated, market, focus on how to drive your costs down and your efficiencies up.Whatever pricing strategy you use, make sure that you specify it in your marketing mix plan and write down the reasons you chose that strategy. Then, at least on an annual basis at the time of your business plan update, review your chosen marketing strategy (including your pricing strategy) and ensure it is the right strategy for the product life cycle, for the market conditions, for your buyers, and for the competitive environment at that time.

Cynics Plague London Stock Exchange Nasdaq Merger Deal

A few London Stock Exchange brokers and traders are wondering what benefits, if any, would be realized from merging with Nasdaq? The answer to that question is that no one is entirely sure.CEO of the London exchange, Clara Furse, declined Nasdaq's $4.1 billion offer almost fourteen days ago, as she has previously declined multiple similar proposals since taking charge of the exchange five years prior.However many investors in London are extremely optimistic that a winning bid is coming from the US that they have hedged the stock prices of the London exchange by a hearty twenty percent above the offer, even as the market continues to loose its footing and slip from its high point on Monday. During the Day Thursday, values edged up 1.5 pence, to finish at £11.395.In spite of the frenzy of many London exchange investors looking to liquidate their shares in the near future, a few market players are less than hopeful about merging the markets. The cynics also include a former Nasdaq executive."I'm not sure those advantages are so great," stated Lynton Jones, former chief executive of Nasdaq International "If you are able to create one company with one set of technology, one rule book and one set of regulations, then you begin to see cost reductions."It appears unlikely in any combination of the London exchange and a United States market, Mr. Jones said. A recent visit by Nasdaq executives and investors who possess long standing and well established positions in the London exchange did not help in efforts to clear up the predicament, individuals who have been briefed on the talks say."It's still sort of a chess match," said Richard H. Repetto, an analyst with Sandler O'Neill & Partners. Nasdaq and London market officials have not conferred face to face or floated an offer since its initial disclosure on March 10th of this year.Possible complexities of any integration are intimidating to a large extent. Both the Nasdaq and the London Stock Exchange are in the process of buying new and different trading technologies. Nasdaq acquired the electronic brokerage and trading platform Instinet last year and is switching to the Inet system. The London exchange just invested millions of pounds into a new digital platform known in the industry as Sets that will go online next year.Another issue that is currently muddying the waters is also one of the items that makes London so attractive to the Nasdaq and others; the differences in regulation. Immediately after Nasdaq's initial proposal, the Securities and Exchange Commission of the USA and the Financial Services Authority (F.S.A.) of Britain made a formal agreement promising to substantially increase their mutual cooperation. The chairman of the S.E.C., Christopher Cox, said he could not foresee future regulatory obstacles to consolidation, and also stated regulators would be wise not to "suffocate transactions."Nasdaq’s offer comes along with London's strength is beginning to compete with New York, as it attracts international investors and emerging capital. British officials are promising heavy support for this merger. A new international business council continues to be one of the top locations for international company’s most valued activities.

Hollywood Stock Exchange - The First And Biggest Stock Simulator Is Looking Pretty Shabby

Back in 1993 on a movie tracking newsgroup, a group of guys started a predicting game. They set up a system where they could bid on upcoming films, and then figured out math formulas based on the buzz and the activity of those films in regards to the newsgroup to see if the price would rise or fall. It soon began to expand enough to become a website with an actual program running on it and thus the HSX or Hollywood Stock Exchange was born.The HSX has gone through a lot of changes since those early beginnings, back in the dot.com boom of 2001, HSX went public and raised a good chunk of capital that it used to finance a TV channel, radio spots, and a whole slew of other market ideas, almost all of which have fallen through now.Hollywood Stock Exchange is protected by US patents due to the specific formulas and processes they use and they have successfully protected themselves against software pirates who have attempted to nab the code for their own use. The HSX runs on a java platform with active server pages helping to keep the actual process hidden behind a shielded server wall.When somebody decides to play the Movie market, they open a free account with HSX and are given 2 million Hollywood Dollars or H$. This is the online currency of the market, and is the only way to play the game. Players then buy and sell shares in the market and if they pick the right shares at the right time, their funds increase. I have been playing the HSX for about 18 months and have achieved more than H$43 million so far, which is not too bad.Some of the biggest gains can come from predicting how much cash a movie will take on it's opening weekend. Because that is applied with a multiplier to the actual stock price, and if it is higher, then the stock price can jump up or down significantly. A big gain I managed to do was put some H$ onto Spiderman 3 before it released to theatres. That stock jumped more than H$43 on the strength of the box office, meaning every share held increased by that amount.The HSX is a very good example of a prediction market, and the software that runs it is always being adjusted and tweaked by the operators to keep the system running at it's best performance. Thus we come to the big problem with HSX, downtime.In the 18 months that this site has been monitored, not a week goes by that the site is not down for at least a couple of hours, or sometimes a full day. Quite often it will simply go down and nobody will say anything, then it recovers and people keep playing. Other times, the server will error or the database will fail, or any number of other excuses may occur that will cause the system to stop working, leaving the game's 10,000+ active players out of luck until the game is reset.Now, even though the site is currently owned by an investment capital firm, I would imagine they would make it a priority to ensure their game, which is known around the world for what it is, would be kept up and stable. But it appears that they don't want to put too much into it. Even though HSX is ranked at 14,731 on Alexa's top 100,000 websites, which means it gets well over 10,000 hits a day if not more. HSX is also associated with the movie speculation site the numbers.com as they share information daily and have cross-links.I find that quite sad as this type of site has a strong potential and it seems to be being squandered by the owners who seem to have no idea what to do with a concept like this, other than to let it sit without much improvement and let it die a slow death through neglect.

How Information Technology Has Transformed the Operations of the Nigerian Stock Exchange

The Nigerian stock exchange NSE, also known as the Nigerian capital market has experienced a very robust growth in the last decade, in terms of activities, transaction types, volume and value of trade, number of listed companies and number of capital market operators. It has also witnessed a growing governmental presence in the area of bond issuance to finance development projects. The stock exchange is one of the most profitable ventures for wealth creation in Nigeria today. However, this was not the case in the previous decades when it was a case of delayed transactions coupled with bureaucratic modes of operations that had to be tolerated by Nigerian investors.Information technology can be said to be the Messiah of the NSE because it has helped to curb a lot of fraudulent schemes from dubious stock brokerages and issuing houses as well as providing a transparent and more efficient mode of operation for this gold mining sector. This Messianic effect can be seen from the changes that have occurred in the recent past.First, it was the introduction of the Central Securities Clearing System (CSCS). This is a subsidiary of the NSE that monitors the activities of the exchange in a computer based environment by serving as an intermediary to all transactions thereby providing a fair trading system for all investors. However, the NSE invested heavily in launching the Automatic Trading System (ATS). This system allows for automation of the capital market operations. As a result of this initiative, the transaction period was drastically reduced from an average of three months or more to a trading day plus three other working days.After the automation of the stock exchange floor, the Securities Exchange Commission launched the implementation of the e-bonus, e-dividend, e-allotment and e-IPO.The emergence of GSM operators did not only ease communication and provided job opportunities, it also had a great effect on the markets credibility, in the year 2006, a phone based alert program was introduced. This in turn increased the investors trust in the Nigerian capital market transactions.The impact of Information Technology on the capital market would not be complete without a mention of the internet boom as communication with stockbrokers and shareholders have improved so also information like market capitalization, all share index, value and volume of stock traded, bulls and bears, are all available.

AMEX - The Third Stock Exchange

American Stock Exchange directors Alan Quasha, Philip Frost and others hit on investment option that the individual investor should consider: The Exchange-Traded Fund that combines the best of two worlds.Many of us are familiar with the two major U.S. stock exchanges, the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ), for very obvious reasons. The NYSE is the stock exchange with the largest dollar volume in the world - the combined capitalization of all its listed companies was over $30.5 trillion (as of 31/12/07) - and its almost 4,000 listed companies make it one of the three stock exchanges with the highest number of listed companies. The NASDAQ has more trading volume per day than any other stock exchange in the world, and with its over 3,900 listed companies it competes with the NYSE for the second highest number of listings (the Bombay Stock Exchange has over 4,700 listings making it the stock exchange with the most listings, yet it has a combined capitalization of less than $2 trillion).The third largest U.S. stock exchange with over 850 equity listings is the American Stock Exchange (Amex), and while it may seem to pale in comparison to the NYSE and NASDAQ it has many positive attributes that set it above its larger brothers. The Amex has much more liberal policies when it comes to the listing requirements, and this makes it much easier for small and medium sized companies to list. However, there is another aspect of the Amex that makes it attractive to the small investor - and it is here that its uniqueness and innovation is expressed.In 1993 the Amex gave birth to a new investment instrument called the Exchange Traded Fund (EFT). In conjunction with State Street Global Advisors, Amex launched the first exchange-traded fund (ETF) with the introduction of the S&P 500 index fund (SPDR - colloquially termed "spiders"), which was linked to the S&P 500 Index. Since then, ETFs have flourished across all the stock markets, yet the Amex remains the home and breeding ground of the majority of ETFs. The flurry of activity following the introduction of the SPDR gave rise to many ETFs, many of them index-linked, and the years immediately following the SPDR's burst onto the investment stage coincided with the tenure of Amex governors Alan Quasha and Philip Frost, who together with the Amex leadership nurtured the ETF revolution.To understand what an ETF is, and also to appreciate its advantages over other investment strategies, requires a basic knowledge of some of the classic investment options available to the private investor. The ETF is in reality a mutual fund that benefits from the advantages of a fund, yet it acts as a regular bond or stock, and thus incorporates the advantages of a stock, thereby eliminating the limitations of the mutual fund. (Many mutual funds - and in turn, ETFs - are linked to indices, which means the funds mimic the successful diverse combination of investments that comprise an index.)A mutual fund is a collective investment fund which incorporates a basket of shares of listings across the market and it is seen as one of the most solid forms of stock market investment. This is due to its management by professional managers, but primarily due to the fact that it comprises a diverse portfolio covering many spheres of the market, and thus it is less vulnerable to sectorial fluctuations. Not only does it offer the small investor this cross-market diversity, but he is able to invest in numerous and high quality companies that would require funds far beyond the financial abilities of private individuals. (Of course the exact solidity and yield of the mutual fund depend on the declared aims and scope of each mutual fund.)Regular stocks and bonds are the most basic commodities of a stock market. They are the shares that offer the public ownership in part of the listed company. Unlike shares in a mutual fund that may only be traded at their closing price at the end of the trading day, classic stocks may be traded at any moment, and the price fluctuations during the day can be utilized by investors in speculative activities. Thus the most fluid, dynamic and flexible investment on the stock exchange is the regular stock.The exchange-traded fund combines the strongest aspects of mutual funds and regular stocks in offering the solidity and diversity of the mutual fund, together with its increased funds and professional management, and also incorporating the fluidity and dynamism of the stock, allowing all the investment activities and real time behavior of the stock. Additional benefits include lower management expenses, as regular brokerage fees apply, tax incentives expressed by lower rates, and the short-term capabilities of the stock. In effect, while investment in a mutual fund resembles an investment in stocks across the market, the ETF allows one to trade in numerous stocks across the entire market as if they were one stock.With the many benefits of the ETFs, it is no surprise that this market has grown include hundreds of ETFs within only a few years. The Amex remains the fertile ground for the majority of ETFs, and this will continue due to its experience and flexible constitution. This fast growing investment option is estimated to surpass a capitalization of $1 trillion by 2010, and it is certainly one of the prime investment instruments that the individual investor must consider.

How Some Win And Others Lose On The Stock Market

by HappyRiches Trading the share market is fraught with dangers. It is not as stable as some other investments. The property market is more stable, unlike the share market, it is not up one day and down the next. In fact, even during the day, the share market will go up an down many times. Because of this, many people do not like getting involved in the share market. When day trading became fashionable during the dot com boom of the late nineties, and many people left their jobs to become day traders, the market was perceived to be mostly going up. Nonetheless, many day traders were losing their money very quickly, with one day trader, Mark O Barton, completely losing it when having lost everything on the markets. Barton killed his wife, children, and office workers at his stockbroker's office, as well as people at a day trading center across the road from the stockbroking firm. Barton was not the only day trader to lose his money and then commit murder, but he killed the most. The number of day traders who lose all their money is said to be about 90%. This is the same percentage that is often quoted for start up businesses going broke in the first year. Not only is the percentage of failure interesting, it also tells us the reason people fail at business, and the reason people fail as day traders, could possibly be the same. Most people would like to be making $1000 a day, if they could. Unfortunately, many, who try to achieve this, go broke instead. One of the main reasons you will find for this is that people try to do things on their own rather than under the guidance of a mentor or coach. A mentor or coach often makes the difference. Barton would not have lost his money and killed all those people if he had not been a maverick, who thought that he alone could beat the market. In the end, according to Barton, it was not his bad judgment or his emotional instability that caused him to lose, rather it was his wife, the stock brokers and the other day traders who were responsible for his losses. Now, had Barton been willing to listen to people and get some good advice, he would have been able to make $250,000 in a year and then go to build this into a substantial fortune. Chris Kobewka had always wanted to be a stock broker from the age of thirteen. Chris's father died when he was ten years old and he became the man of the house. Naturally, he felt he would have to earn an income to be the provider. When Chris saw the houses and cars stock brokers owned, he just knew that is what he needed to be if was going to a good provider. But Chris didn't become a stock broker, he became a mechanical engineer. Eventually Christ participated in the management buyout of the company for which he worked and was instrumental in turning the company into a profitable company. Chris never lost his desire to make it on he markets. Well, he didn't become a stock broker, but Chris has hit the jackpot and in his first month of trading turned $360 into $19,800.00 trading less than one hour a day. Oddly enough, Chris has hit on a similar method to what I have developed when trading. The difference between Chris and myself is he is training people to do what he is doing.