For those trading in the stock market, the term direct market access trading is a common one. DMA refers to electronic trading where the investors can directly execute the trading activity by interacting through an electronic order book. The order book contains a list of the orders taking place in the stock exchange marketplace between the buyers and the sellers. The concept of direct market access trading is an interesting part of every trading domain.
With the help of the DMA, the traders don't have to take the broker's help to access the stock exchange. They can access the book and choose the price of their orders without the interference of any individual in this matter.
How to trade using direct market access?
With the help of an online trading platform, the trader can place an order that will help them to purchase the security. While using the DMA trading process, the order is generally recorded in the online trading book, and the information is communicated to the stock exchange servers. The order is then automatically received by the stock exchange servers. The purchaser will have to wait for the price rate to match the seller. Once the match is found, the trading takes place.
The sole purpose of direct market access trading is to ensure a direct and broker-free trading process. However, the process of DMA is suggested for experienced traders who have been in the market for a long time. The software is designed to suit advanced trading strategies. For instance, the trader might be required to use algorithms. Thus a novice or inexperienced trader will not be able to fulfil the process successfully.
Benefits of DMA trading
Since no broker is involved in the trading process, the trader can get direct access to the market quickly, and the transaction cost is reduced. Moreover, the investor or trader can take part in the pre-market and post-market auctions taking place in the market.
Since the trader is trading directly using the software, the trader is not vulnerable to the exposure of any personal information like the name, address and phone number to the external platforms. The investor will access the trading market on their own, and hence the information that they shares will be under their control.
At OnixS, we provide DMA and software development kits that help in the immediate trading process. If you have any more questions around what direct marketing access trading is or need a hand with our SDKs for DMA, get in touch.