Direct market access
What is direct market access?
This is a way of allowing private investors to buy and sell directly on the order books of a stock exchange. It's done electronically and helps firms execute trades at lower costs.
Where have you heard about direct market access?
The service is offered by some stockbrokers on the London Stock Exchange. It's relatively new to the UK but has been offered on other stock exchanges around the world for several years.
What you need to know about direct market access.
It's designed to offer flexibility and transparency for advanced traders. Access to order books is usually restricted to broker-dealers and market makers known as sell side firms. Direct market access allows buy side firms and other private investors to interact directly with the order books. This means they can use the same infrastructure as sell side firms, such as investment banks, but they have more control over their trade. The process can lower the cost of trading and reduce the risk of errors, because it's all done electronically.