The financial asset markets (stocks, bonds, commodities, futures, etc) have proceeded the furthest towards total immersion in the social nervous system. A financial market that has moved totally to an electronic network is the over-the-counter market, NASDAQ. The market is a totally computerized communications network with nodes (market makers) for each stock. Once the information comes up on the screen, the deal can be consummated. Before automating the over-the-counter market was very small. Now it rivals the NYSE. The success of NASDAQ forced the other exchanges to automate.
With improved communications and networks, financial players such as pension funds and mutual funds can trade stock between themselves and avoid the traditional market altogether. Reuters, a British financial firm, has established two worldwide automatic trading systems, Instinet and the Crossing Network in which traders can consumate transactions without brokers. Another automatic trading system is POSIT and a new one is GLOBEX for commodities.
In addition, financial institutions have created whole new classes of financial assets. One made famous by Miliken is junk bonds. Another are known as derivatives. These include options, futures and composite securities which bundle securities to reduce market risk. These composite securities did not perform well in 94.
Another aspect of the impact of computers on asset markets is the new computer programs to play the market. These programs are based on a variety of quasi-intelligent software and optimization techniques. These programs contributed to the magnitude of the crash in 1987.
For the individual investor the new computer-communications technology have made possible access to asset markets through personal computers 24 hours a day. There has been a proliferation of information services accessible through personal computers such as the Dow Jones information service, which enable the customer make comparisons between financial alternatives. Through information utilities such as CompuServe, you can trade any time of the day of night. Also, one aspect of the growth of Internet has been in increase in asset information sources and brokerage firms.