INTRODUCTION Online trading is a practice that has exploded in growth and popularity. Currently, there are approximately 150 brokerage firms offering online trading (Future Banker, 2000). Societies use of the Internet has changed the entire concept of securities trading. In fact, Minkoff (2000) termed society=s use of online trading as "mainstream". In further support of this notion, he went on to add that by the year 2005, it is predicted that 81 percent of the households that own stocks will have an online account. Currently, 25 percent of the households that own stocks have an online account. Another study estimated that by the year 2003 approximately 9.7 million American households will manage more than $3 trillion in assets spread among some 20.4 million online accounts (Drummer, 1999). These are mind-boggling statistics compared to just three years ago when electronic trading was regarded a fad (Carroll, Lux, and Schack, 2000). Presently, in the U.S. one out of every six stock trades occurs over the Internet (Kassenaar, 1999). In 1999 online brokerage firms raised $1.76 billion in capital markets due to approximately five million online investors (Economist, 1999, and Registered Representative, 1999). Despite all of its growth and popularity, online investing possesses a host of problems and challenges for everyone involved. "You can make money fast and lose it faster," concluded Drummer's (1999, p.1).
