Traditionally, trading directly with the order book was only available to broker-dealers and What are value stocks? A value company is a company that app... More makers, but DMA enables private firms and What are value stocks? A value company is a company that app... More to directly interact with the order book. This service is also available by some .
Visit our What is an online broker? In online trading, a broker is a ... More page to find out which of our advertising brokers offers direct market access:
How is DMA different from traditional trading?
In the traditional method of placing a trade, your broker requests quotes from In trading, quote is a combination of a bid and an ask pric... More, and therefore a single What are value stocks? A value company is a company that app... More, at any one time. You can then decide whether or not to accept it.and then presents the best
However, DMA allows you to see different prices of different orders and place your own order accordingly, bypassing intermediaries. Trading in this way creates a number of advantages.
Advantages of DMA
Bypassing intermediaries can mean faster execution of transactions and lower associated costs.
DMA also gives you greater control as a What is a trader? A trader is a person who buys and sells... More, because instead of accepting a from a broker, you are now making an offer and managing the transaction yourself. This means that you place orders at the What is price? The price is the measure of the value of good... More you would like to get filled at and then wait for your order to be accepted.
Market, however, ultimately influences the at which an order is filled, because you have to wait for a counterparty to accept it.
There are a number of other advantages to using DMA, including:
- You can usually achieve a slightly better price for your order since there is no A market maker is a company (often a broker) that quotes an ... More involved to take a cut.
- Transaction fees are generally lower because you are only paying to use the broker’s technology rather than paying for What is order management in trading? In trading, order mana... More services.
- Because no intermediary is involved in placing the trade, DMA also offers greater anonymity.
Despite these advantages, the savings with DMA are relatively small and will be of most benefit to particularly active traders.
Not all brokers offer DMA and those that do may require a higher minimumbalance.