Electronic direct trading is a bilateral trade conducted electronically without the involvement of a third party.
This includes trades conducted via single-bank trading platforms but also via direct electronic direct price streams with API connectivity.
What Is Direct Market Access (DMA)?
Direct market access (DMA) refers to access to the electronic facilities and order books of financial market exchanges that facilitate daily securities transactions. Direct market access requires a sophisticated technology infrastructure and is often owned by sell-side firms. Rather than relying on market-making firms and broker-dealers to execute trades, some buy-side firms use direct market access to place trades themselves.
Benefits of Direct Market Access
With direct market access, a trader has full transparency of an exchange’s order book and all of its trade orders. Direct market access platforms can be integrated with sophisticated algorithmic trading strategies that can streamline the trading process for greater efficiency and cost savings. Direct market access allows buy-side firms to often execute trades with lower costs. Order execution is extremely fast, so traders are better able to take advantage of very short-lived trading opportunities.