With all these viruses and computer hacker stories that you may keep seeing in cheesy movies, we certainly understand why someone might feel uncomfortable leaving all of his or her financial information inside somebody else's computer system, and making transactions through the Internet. Fear not. There's a heckuva lot of protection built into the system.

All online brokerages will have a portion of their website devoted to explaining the measures they employ to protect your transactions. With some online brokerage systems, you can use a direct-modem connection, so those transactions are not even transmitted over the Internet. If you are making securities transactions that do take place over the Internet, make sure that your brokerage is using high-end encryption.

Encryption is the process developed by super-genius computer nerds -- but, you know, the good kind -- to scramble data so that only the intended receiver can use it. The higher the number of bits in an algorithm, the more sophisticated the encryption. (Repeat this last sentence three times, memorize it, and use it liberally in cocktail party conversations, particularly a conversation you wish to end.) A 128-bit algorithm is the encryption level used by most online brokerages. It's the highest level of security currently allowed by U.S. law.

Is 128-bit encryption enough for you? Well, 128-bit standard is so powerful that the U.S. government currently does not allow the sale of it overseas. (Though Canadians are allowed to download it. But should we really trust our friends from the Great White North that much? Hmmm....) Stealing information that is encrypted at that level is virtually impossible -- even if it does seem awfully easy when you watch those movies about basement-dwelling unemployed computer hackers. Just ignore the movies -- they aren't remotely accurate.

What you should pay attention to is whether the security measures are operating while you're making your transactions. Depending on what browser you use, you'll either see a closed padlock icon or a key icon to demonstrate that security is operating. When you see that those icons are unbroken, you'll know that your transaction is occurring in a secure sockets layer. When you see these, you'll know that your transaction is being encrypted -- and accordingly, you should feel safe about what you're doing.

Additionally, online brokerage services feature passwords and personal identification numbers (PINs) that you select.

[Editorial pause: Doesn't the term "PIN number" bug the heck out of you? It means "personal identification number number." The next time somebody redundantly refers to a PIN number in your presence, look down your nose at them and sarcastically belittle their uncouth. Do not mention that we told you to do this if you get punched in the nose.]

Your PIN needs to be given every time you make a transaction within your account, and you can change your PIN as often as you like.

While concerns about online security will always be there, rest assured that the brokerages themselves have a very, very high stake in making you feel comfortable about the level of security being used. While it may be true in this world that nothing is perfectly safe, online trading is certainly as close as offline trading in providing safety in your financial transactions.

Also, no matter which brokerage you're selecting, make sure they are insured by the Securities Investor Protection Corporation (SIPC), which provides up to $500,000 of coverage (limited to $100,000 for cash).

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