Benefits of Direct Access Brokers
5 stars based on
Direct-access trading is a technology which allows stock traders to trade directly with market makers or specialists, rather than trading through stockbrokers. Direct-access trading system transactions are executed in a fraction of a second and their confirmations are instantly displayed on the trader's computer screen.
Most direct-access firms charge commissions based on trading volume, usually in terms of calendar months. Increased trading activity typically reduces commission for each trade. Commissions are generally on a per share basis and typically around 0. Reduced commissions are considered a must for scalpers that trade significant volume on a daily basis. Unlike traditional online brokeragesdirect-access brokerages usually pass through the exchange fees involved in trading to customers.
Examples are specialist fees, Electronic Communications Networks fees, exchange modify and cancel fees, clearing fees, regulatory fees etc. Some firms set pre-established fee schedules rather than passing on exchange fees directly on a per case basis. Some firms do not charge their clients a platform fee. Instead, they broker offering direct access trading a lower-end, less-featured electronic trading platform to minimize their costs.
More complex systems are offered as an upgrade option, but come with monthly fees. Costs can be recovered elsewhere, including hidden fees, or giving a client significantly less interest for cash balances. Some firms have platform or software fees which cover firms' costs of developing, using and maintaining their proprietary trading software or platforms. However, most firms will waive the fee if you trade up to a specific volume per calendar month.
From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material broker offering direct access trading be challenged and removed. March Learn how and when to remove this template message.