The advent of electronic trading over the last several years has clearly opened “doors of efficiency” to individual traders, with pluses that simply didn’t exist in years past. Now, with an Internet connection and varying levels of hardware and software dependent on your trading needs, you can trade from the comfort of your own home or office. Electronic trading has leveled the playing field, so to speak—as individual investors can have access to markets, on a real-time basis, as never before possible.

Currently single stock futures trade on all-electronic exchanges, so this chapter introduces you to the world of online trading systems. Nasdaq Liffe Markets (NQLX) and OneChicago are wholly electronic exchanges. If and when Island ECN introduces securities futures products, it, too, will be solely an electronic model. New exchanges these days find that to create an electronic platform versus a floor-based model is dramatically more cost-effective and more what the public is seeking for most types of trading. Products can be launched and de-listed easily. Trading pits never have to be built. Trade execution is simpler and, in most cases, as reliable or more reliable. And, the electronic connection can actually add liquidity to the markets, as it allows more players access to these contracts. Electronic trading has already had the effect of adding liquidity to securities, futures and options markets and should help increase participation in single stock futures, as well.

If you’re not already familiar with online systems, you should be. It is changing the way trading is done…quickly. A point — just because single stock futures contracts are traded through an electronic platform like NQLX’s or OneChicago’s, does not indicate that you have to trade without the assistance of a broker or that you must personally trade online. You may choose to work with a broker and he or she then transmits your orders electronically to NQLX or OneChicago. Or, your firm may have its own electronic trading system to which the firm’s customers have access.

This would indeed, then, allow you to make your own trades via computer. The only point here is that exchanges have electronic platforms versus trading floors for single stock futures, and you have choices on how you personally transact your business.

If you do decide to trade SSFs online, you may have the opportunity to see current markets in action, just as the floor traders would see current bid/offers, in the pit. The markets can move rapidly, and you can experience this when watching an online system. The bid/ask prices may change faster than you can blink sometimes. Don’t let that speed thwart your desire to trade. Electronic platforms level the playing field for individual traders—you likely will see the same bid/ask information as the market makers, who are on the other side of trading single stock futures. You no longer have to wait for your broker to contact you or try to get through to your broker—you yourself can place your buy and sell orders with the click of a mouse once you learn how to navigate the system.