Understanding ECN and After Hours Trade With Day Trading Software

The day trading software is an important tool that guides traders employing this style before they execute their moves on the exchange floor. Traders can readily try trading online, although this does not guarantee to eliminate the role of specialists and market makers. Nevertheless, it provides one with several other conveniences, like allowing one to trade from an office desk at work or in the comfort of one's home. Day traders need the tool as this is their bible.

A problem may occur if there is a computer glitch for you cannot be sure if your order has went through. There is a need to contact your broker or better issue a cancellation of the order before re-submitting a new one in a case like this. This time you become aware that online trade execution is not instantaneous. You still a need to find yourself to trade using limit orders instead of having market orders.

Nowadays, the increasing interest of traders and investors in the industry has caused for a greater demand for additional trading hours after the markets close. New York stock markets for instance usually open for trading from 9:30 in the morning until 4 o'clock in the afternoon EST on Mondays through Fridays. However, these markets do not open on certain holidays and this is something that traders must take note.

With the day trading software you can understand the mechanics of a system known as ECNs or Electronic Communications Networks. This can be quite complicated, but after-hours trade practice has become very popular because it makes it easier for investors to gain access on the after-hours market. Nowadays, markets allow activities after the closing bell which is commonly known as after-hours trading.

Day traders close all positions at the end of each day. These types of traders are people who likewise know how to set the limits based on their experience and guide from educational tools. These are professional traders who can quickly make dozens of executions in a single day. They make a career out of buying and selling stocks as they have mastered the day trading software.

To know more about these trading, simply visit http://www.tradestocksamerica.com.

Article Source: http://EzineArticles.com/?expert=Linda_Abrams

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SocGen profit despite trader loss

Societe Generale made a profit in 2007 despite a trading scandal that cost the bank 4.9bn euros ($7bn; £3.7bn).
The French bank said it made a net profit of 947m euros for the year, although this was down 82% from 2006.

Last month, SocGen announced massive losses which it blamed on rogue deals carried out by Jerome Kerviel - a junior trader at the bank.

But an internal report has acknowledged that better systems might have prevented the fraudulent trades.

The bank made a loss of 3.35bn euros in the final three months because of "hidden market activities", it said.

Investigation

An internal investigation by an independent committee set up by the bank found that the bank's own systems were partly to blame for the biggest trading losses in banking history.

The results of the investigation made public on Wednesday also show that rogue trades were first made back in 2005.

The report said risk controls at the French bank "lacked depth".

It said staff had failed to make detailed checks and the bank lacked systems used by rivals that may have identified the rogue trades.

No accomplices

Despite some speculation to the contrary, the report said there was still no evidence to suggest that Mr Kerviel acted with the help of any accomplices.

The report did not draw any conclusions about the responsibility of Mr Kerviel's managers, as a criminal investigation by French judges is continuing.

Societe Generale's board has stood behind executive chairman Daniel Bouton, despite widespread calls for him to resign.

Mr Bouton has said Societe Generale plans to weather the crisis as an independent bank, despite reports of a potential bid from rival BNP Paribas.

"I am completely determined to continue with our strategy... even taking into account our very bad year in 2007 due to the financial crisis and this fraud," he told Reuters news agency.

To help plug the losses and pay for a 2bn euro write-down linked to the sub-prime crisis, SocGen began selling 5.5bn euros worth of shares to existing shareholders on Thursday to raise funds.

It also said it would cut its dividend.

In custody

Mr Kerviel, 31, is in custody while the case is being investigated.

He is accused of breach of trust, falsifying documents and breaching computer security.

A court ruled that he should be detained because of the "necessities of the investigation" and the risk that he could flee the country.

BBC NEWS

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Amazon Expects Sales to Rise in 2008

Thursday January 31, 5:38 am ET
By Jessica Mintz, AP Technology Writer
Amazon Says It Expects Sales to Rise, and 4Q Profit Soars, but Shares Sink on Outlook


SEATTLE (AP) -- This year isn't looking quite as sweet for Amazon.com shareholders as 2007. Despite a possible recession in the U.S. economy, the Web retailer said it expects sales to rise briskly again in 2008. But the gains won't translate as readily to bottom-line growth.

"A lot of old Amazon bears are going to be growling," said Tim Boyd, an analyst at American Technology Research.

And growl they are. Shares of Amazon.com Inc. plunged $8.92, or 12 percent, to $65.29 in extended trading Wednesday.

Amazon had revealed after the closing bell that its holiday-quarter profit more than doubled on revenue that jumped 42 percent. But while it forecast stellar sales growth in the coming year and executives shrugged off concerns about the economy, its operating income guidance fell short of what Wall Street was expecting.

Boyd said international spending could carry Amazon through a slowdown in U.S. consumer spending. However, based on the company's lackluster profit guidance, the analyst said Amazon appears poised to spend more and pocket less as it expands and fights off competition.

Some of the retailer's cash may be spent fending off eBay Inc., a competitor for Amazon's third-party seller business, Boyd said.

He also said Amazon's digital music business may be losing money in this early phase. Amazon would not say how its MP3 store performed financially.

In 2005 and 2006, investors and analysts were similarly unhappy with near-term results as Amazon spent heavily on technology and content. When spending slowed and margins rose last year, the dot-com returned to favor and shares climbed. Now, said Boyd, it seems Amazon has returned to investment mode.

Amazon matched Wall Street's expectations Wednesday when it reported its fourth-quarter profit more than doubled to $207 million, or 48 cents per share, from $98 million, or 23 cents per share, in the same period last year.

Strong domestic and international sales in all categories drove revenue up 42 percent to $5.67 billion, topping analysts' average prediction of $5.37 billion in revenue, according to a Thomson Financial poll.

Changes in foreign exchange rates lifted sales by $195 million.

"This company has just done an unbelievable job," Boyd said. "They're obviously just eating eBay's lunch. They're eating every one of their competitors' lunches."

Amazon's gross margin was lower than in the year-ago quarter. In a conference call, Chief Financial Officer Tom Szkutak said the company's entrance into new product categories eats into profits. That's because Amazon sells at competitive prices even before it has amassed the sales volume and business relationships necessary to command lower wholesale prices.

The retailer's margins also take a hit as the number of people who pay up front for a year of free express shipping rises, as it did in 2007, and as the mix of products sold on the site shifts.

For all of 2007, Amazon said it earned $476 million, or $1.12 per share, a 150 percent increase over the previous year. Annual sales grew 39 percent to $14.84 billion.

The midpoint of Amazon's operating profit outlook for the quarter and the year fell short of what Wall Street is currently looking for, even as sales forecasts topped analysts' view.

For the current quarter, Amazon forecast between $3.95 billion and $4.15 billion in sales. For the full year, it predicted revenue of $18.75 billion to $19.75 billion.

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Investors Want More Interest Rate Cuts

Thursday January 31, 5:54 am ET
By Martin Crutsinger, AP Economics Writer
Investors Demand More From Federal Reserve Despite 2 Big Rate Cuts in 8 Days


WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke, criticized last year for being too tentative in cutting interest rates, has shown he can act boldly. But the Fed's two aggressive rate cuts in the past eight days have left investors demanding still more.

That may be a sign of how much trouble the economy is facing, with many analysts contending that the country is flirting with a recession and may, in fact, already be in one.

The Fed announced Wednesday that it was cutting its federal funds rate, the interest that banks charge each other, by a half-point, double the quarter-point cut that many economists had been expecting. That move followed on the heels of a reduction last week in the funds rate of three-quarters of a point, which had been the biggest single rate cut in more than two decades.

Initially, the Dow Jones industrial average was up by more than 200 points after the Fed announcement, but then investors pulled back and the Dow finished the day down 37.47 points, indicating lingering worries about the economy.

All the changes mean that the funds rate, which stood at 5.25 percent in early September before the Fed started cutting rates, now is at 3 percent. The Fed is hoping the lower rates will stimulate the economy through increased borrowing by consumers and businesses.

While Bernanke and his Fed colleagues were criticized last year for giving the appearance that they were cutting rates only grudgingly, the January rate cuts have signaled that the Fed is in full-blown crisis mode.

The 1.25 percentage point reduction in the funds rate in just over a week is unprecedented in recent memory. The Fed hasn't been that aggressive about cutting the funds rate since the early 1980s, when then-Chairman Paul Volcker was reversing a tightening cycle that had driven interest rates to the highest levels since the Civil War in a successful effort to break the back of a decade-long bout of inflation.

In its statement Wednesday, Fed officials said its string of rate cuts "should help to promote moderate growth over time and to mitigate the risks to economic activity."

Analysts saw that language as an effort to tell markets that just because the Fed slashed rates in January, such bold actions should not be expected in the future. But those words could very well fall on deaf ears.

"The markets felt the Fed had fallen behind the curve. That caused a loss of credibility," said David Jones, chief economist at DMJ Advisors. "Once the Fed loses credibility, it can be hard to regain it."

Investors are already betting that there are more rate cuts to come. A futures contract tied to the federal funds rate is projecting that rate could get down as low as 2 percent this summer.

The Fed's next meeting is March 18 and that will be followed by meetings in April and June. Many analysts said the Fed could trim the funds rate by a series of quarter-point moves during that time period, especially if the economic data remains weak.

The government reported Wednesday that the overall economy, as measured by the gross domestic product, grew at a barely discernible 0.6 percent rate in the October-December period. The fear of some economists is that the GDP rate could slip into negative territory in the current quarter. By one definition, a recession occurs when the GDP is negative for two consecutive quarters.

While the Fed is not publicly forecasting a recession, Bernanke and other officials have said they expect to see a period of slow growth, reflecting the impact of the severe housing slump and the credit squeeze which hit last August.

"Financial markets remain under considerable stress, and credit has tightened further for some businesses and households," the Fed said in explaining Wednesday's rate cut.

"The Federal Reserve is obviously very nervous about what is going on in the financial system and the housing market," said Mark Zandi, chief economist at Moody's Economy.com.

While Fed officials were widely viewed as being slow to react last fall, analysts said they are now making up lost ground.

"The Fed misjudged the problems in the economy and the financial system through the Fed's December meeting. They just underestimated what was going on," Zandi said. "But I think they caught up in January and now they are fully engaged."

Zandi predicted a series of quarter-point rate cuts at upcoming meetings, but he said if the financial system begins to unravel, the Fed will return to more aggressive half-point rate reductions.

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US shares make stunning recovery

US shares rebounded on Wednesday on fresh hopes that regulators will steer the US economy out of a recession.

All three stock market indexes erased deep losses to end strongly ahead. The Dow Jones rose 2.5% at 12,270.17, while the Nasdaq turned around a 4% decline.

The rally followed news of a plan to bail out bond insurers, which lie at the heart of the financial system. They guarantee about $2 trillion of assets.

Earlier, European stocks fell. The UK's FTSE 100 was down by 3.9% at one point.

Panic has swept through stock markets worldwide on fears that key global economies will enter recession.

Relief rally

On Tuesday, the US Federal Reserve made its biggest rate cut for 25 years to stoke up growth and bolster markets.

However, worries persisted that the move may have come too late, as many firms have already reported lower profits and a worsening business environment.

Another major concern in the US has been the fear that bond insurers embroiled in the sub-prime crisis will not be able to cover their liabilities.

This could force banks to write down further losses on investments backed by crisis-hit sub-prime mortgages.

This meant news of the government plan to inject capital into bond insurers gave fragile confidence in the financial sector a boost, and sent shares in banks, including Citigroup and JP Morgan surging, while technology firms also gained.

The technology-heavy Nasdaq rose 1%, while the wider S&P 500 index also ended ahead, up 2.1%.

But volatility is expected to persist in the coming weeks.

Market movers

Earlier, the UK's FTSE 100 index finished a nerve-wracking session 131 points, or 2.2%, lower at 5,609.3, erasing gains it had made on Tuesday.

Germany's Dax lost 4.9% at 6,439.21, while France's Cac 40 was down 4.3% at 4,636.76.

Shares suffered after the European Central Bank hinted it would not follow the Fed by slashing rates, and analysts said the Bank of England was unlikely to accelerate rate cuts.

"The uncertainty about corporate earnings growth in 2008 has risen, not only in the financial sector," said Matthias Schellenberg, managing director at ING Investment Management.

"The markets are expecting a flood of profit warnings in the next few months."

So far this year, the FTSE 100 has lost more than 13% of its value, wiping about £225bn off the total value of the companies listed on the index.

Germany Dax's index has been one of the worst hit in Europe, down almost 20% this year.

Werner Bader, a stock strategist at LBBW bank, put the falls down to the fact that German firms make most of their earnings overseas, particularly in the US.

"Dax companies are more exposed to the global economy because of their strong exports," he said.

Inflation risks

Despite slowing economic growth on both sides of the Atlantic, the Bank of England and the European Central Bank have insisted on the need to fight inflation, making extensive rate cuts unlikely.

Bank of England governor Mervyn King said that the UK faced its toughest economic challenges since 1997, when the Bank gained independence from the government.

European Central Bank (ECB) President Jean-Claude Trichet told the European Parliament in a speech on Wednesday that price growth was still the ECB's main concern.

"In all circumstances, but even more particularly in demanding times of significant market correction and turbulences, it is the responsibility of the central bank to solidly anchor inflation expectations to avoid additional volatility in already highly volatile markets," he explained.

Earlier on Wednesday, Japan's Nikkei 225 had closed up 2%, and Hong Kong's Hang Seng added 10.7%.

BBC NEWS

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EBay wavers after 4Q report

NEW YORK

Shares of online auctioneer eBay Inc. rose Wednesday ahead of its fourth-quarter report, as a Stifel Nicolaus & Co. analyst called the stock his "best short-term idea" -- but retreated in after-hours trading after the report's release.

EBay shares rose $1.81, 6.7 percent, to close at $28.94 in advance of the earnings report and before Chief Executive Meg Whitman announced she would soon step down. In extended trading, the stock initially rose but then retreated to $27.50.

The stock hit a 52-week low of $26.02 on Tuesday, as fears of a recession hurt stocks around the globe, despite a decision by the U.S. Federal Reserve to cut the federal funds rate by three-quarters of a percentage point to 3.5 percent.

In a client note Wednesday, Stifel Nicolaus analyst Scott Devitt said that though eBay is losing e-commerce market share, its competitive position is stabilizing in core areas including liquidation inventory, collectibles and difficult-to-find items, he said.

"While (Amazon.com Inc.) is our best long-term idea, eBay is our best short-term idea," Devitt said.

Devitt, who reiterated his "Buy" rating and $39 price target, also noted eBay's ability to generate free cash flow. He said eBay has bought back $2.8 billion of stock since June 2006, and could repurchase $9 billion in stock during the next two years.

By way of comparison, Devitt noted that eBay generates $6 in gross merchandise volume for every $1 in assets, while Target Corp. generates $1.50 in gross merchandise volume for every $1 in assets.

On Wednesday, eBay reported a 53 percent gain in fourth-quarter profits due to a strong holiday season. It beat Wall Street's expectations, though its future guidance was tepid.

The San Jose-based company said that in the last three months of 2007, it earned $530.9 million, or 39 cents per share. In the same period a year earlier, eBay earned $346.5 million, 25 cents per share.

Analysts surveyed by Thomson Financial had been expecting eBay to earn 41 cents per share. EBay also exceeded Wall Street's revenue projection of $2.14 billion.

Whitman said she was pleased with the results, which ended "a remarkably strong year."

from businessweek

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Asian stock markets plunge amid fears of U.S. recession

Last Updated: Tuesday, January 22, 2008 | 8:59 AM ET
The Associated Press

Global stock markets extended their shakeout into a second day Tuesday, plunging amid fears that a possible U.S. recession will cause a worldwide economic slowdown.

The dramatic declines in Asia and Europe were expected to spread to Wall Street, where stock index futures were already down sharply hours before the trading day began.

Japan's Nikkei 225 index nosedived 5.7 per cent — its biggest percentage drop in nearly 10 years — to 12,573.05, a day after falling 3.9 per cent. Australia's benchmark index sank 7.1 per cent, its steepest slide in nearly 20 years. Hong Kong's Hang Seng index, which slumped 5.5 per cent Monday, was down 8.2 per cent in afternoon trading.

In China, the Shanghai Composite index lost 7.2 per cent to close at its lowest level since August.

Indian Finance Minister P. Chidambaram urged investors to remain calm after trading in Mumbai was halted for an hour when the stock market there fell 10 per cent within minutes of opening. The Mumbai Stock Exchange Sensitive Index ultimately finished down almost five per cent.

"There is no reason at all to allow the worries of the Western world to overwhelm us," Chidambaram said.

Investors across the region dumped shares in frenetic trading on worries that the U.S. economy, battered by a credit crisis and housing slump, will shrink in coming months, weakening demand for Asian exports.

Markets have been plunging amid pessimism about the ability of American authorities to prevent a recession. The U.S. Federal Reserve has indicated it will lower interest rates further, and U.S. President George W. Bush has proposed an economic stimulus package that includes $145 billion US in tax cuts, but investors around the world are doubtful the measures will lift the economy quickly.

"Unless we get some positive 'shock effects,' such as drastic measures from the U.S. government, there is almost no hope for a recovery in stocks," said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.

U.S. markets were closed Monday for a holiday commemorating civil rights leader Martin Luther King Jr. But Wall Street future prices were down sharply, portending a plunge when trading begins at 9:30 a.m. ET.

Noritsugu Hirakawa, who monitors stock trading at Okasan Securities Co. in Tokyo, said investors were spooked by the drastic falls on Chinese and Indian markets — the two emerging economies that are viewed as capable of sustaining global growth even as the U.S. economy sputters.

"The end to the slides in Asian stocks is nowhere in sight," he said. "There is even speculation that China may be exposed to the U.S. subprime mortgage crisis."

In Europe on Monday, investors also dumped stocks, sending Britain's benchmark FTSE-100 down 5.5 per cent and France's CAC-40 index sliding 6.8 per cent. Germany's blue-chip DAX 30 plunged 7.2 per cent to 6,790.19.

That sell-off continued Tuesday throughout Asia, with benchmark indices in South Korea, Taiwan, Singapore and the Philippines all falling more than four per cent. Indonesia's market sank 8.5 per cent.

Asian markets have been in a downward spiral for most of January. Since the start of the year, Japan's Nikkei index has tumbled nearly 18 per cent, while the Hang Seng is down a stunning 21 per cent.

Even the usually upbeat Japanese Economy Minister Hiroko Ota acknowledged that threats were growing.

"We must take the approach of working together with other nations on this," she said on nationally televised news.

From CBCNews

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