DMA and Technology
Technology has evolved the world. At one time a computer would take up an entire room, but now you can hold a computer in the palm of your hand. And they have also grown in power and capacity. Those room sized computers were extremely weak even compared to today's smart phones and tablets. Today's technology makes the past look laughable. Now we have powerful PCs that can handle the most demanding video games and other programs as well. Movies are streamed over something called the internet, and this technology, this internet, has also had its influence on the marketplace. Trading used to be carried out by open outcry on trading floors, but now trading is done with electronic, screen-based technology. Investors began trading for themselves, electronically, rather than going through a broker. Understanding that this was a threat to their business, investment banks began takeover of companies such as Instinet, and they developed their own DMA technologies. Almost all major sell-side brokers now provide DMA to their clients along with algorithmic trading solutions allowing access to different trading strategies.
Direct Market Access, or DMA, is a term used by traders for electronic trading facilities that give traders who want to trade in financial instruments a way to interact with the order book of an exchange. Usually, access to the order book is only given to broker-dealers and market making firms who are members of the exchange. Direct Market Access allows investment companies and private traders to use the information technology infrastructure of investment banks and the market access those firms have. But it allows investment companies and private traders to control a transaction is managed themselves instead of passing control to an in-house trader.
There are many reasons a trader may want to use a DMA instead of other forms of order placement. The DMA offers lower trading costs because the technology is the only thing being paid for. The usual oversight responsibilities that come with a trade passed to the broker are not there. It gives more control over the final execution and the ability to take advantage of liquidity and price opportunities faster. The amount of information leaked is minimized, as the trading is done anonymously, using the DMA's identity as cover. DMA trading is also shielded from other trading desks within the provider's organization. It allows the trader access to the second level of the order book without having to use a broker or a dealer. High frequency trading requires advanced trading platforms and market gateways. Normally, Ultra low latency direct market access handle high amounts of volume with only a five hundred microsecond delay at the most, so traders can get their trade in immediately and efficiently.More information for CFD Providers http://cfdproviders.co
Technology has evolved the world. At one time a computer would take up an entire room, but now you can hold a computer in the palm of your hand. And they have also grown in power and capacity. Those room sized computers were extremely weak even compared to today's smart phones and tablets. Today's technology makes the past look laughable. Now we have powerful PCs that can handle the most demanding video games and other programs as well. Movies are streamed over something called the internet, and this technology, this internet, has also had its influence on the marketplace. Trading used to be carried out by open outcry on trading floors, but now trading is done with electronic, screen-based technology. Investors began trading for themselves, electronically, rather than going through a broker. Understanding that this was a threat to their business, investment banks began takeover of companies such as Instinet, and they developed their own DMA technologies. Almost all major sell-side brokers now provide DMA to their clients along with algorithmic trading solutions allowing access to different trading strategies.
Direct Market Access, or DMA, is a term used by traders for electronic trading facilities that give traders who want to trade in financial instruments a way to interact with the order book of an exchange. Usually, access to the order book is only given to broker-dealers and market making firms who are members of the exchange. Direct Market Access allows investment companies and private traders to use the information technology infrastructure of investment banks and the market access those firms have. But it allows investment companies and private traders to control a transaction is managed themselves instead of passing control to an in-house trader.
There are many reasons a trader may want to use a DMA instead of other forms of order placement. The DMA offers lower trading costs because the technology is the only thing being paid for. The usual oversight responsibilities that come with a trade passed to the broker are not there. It gives more control over the final execution and the ability to take advantage of liquidity and price opportunities faster. The amount of information leaked is minimized, as the trading is done anonymously, using the DMA's identity as cover. DMA trading is also shielded from other trading desks within the provider's organization. It allows the trader access to the second level of the order book without having to use a broker or a dealer. High frequency trading requires advanced trading platforms and market gateways. Normally, Ultra low latency direct market access handle high amounts of volume with only a five hundred microsecond delay at the most, so traders can get their trade in immediately and efficiently.More information for CFD Providers http://cfdproviders.co