Direct Access Execution: ECNs, SOES, SuperDOT, and Other Methods of Trading

Direct access trading means a whole new world of trade execution. Gone are the tradition-bound days of calling a broker, who called a broker, who called the floor of the exchange, where the order was written by hand and delivered by a runner to the floor broker. This was a time-consuming, tedious task that almost certainly guaranteed poor fills. Now, direct access traders can place an order with the click of a mouse button and be filled within seconds, eliminating the middleman and lowering commissions and reducing the infamous "spread". A direct access trader now has many avenues to place a trade: ECNs, SOES and SuperDOT, among others. "Direct Access Execution" walks the reader through the different methods of executing a trade and helps them understand which one to use and when. Each method of executing a trade has its own unique advantage and disadvantages. This book explains when to use each method to capitalize on the advantages of each. After reading "Direct Access Execution", the reader should understand the fundamental differences between all the methods and it allows the reader to easily navigate between them and find the best prices for executing a trade. The author covers in detail: SuperDOT; SOES; SelectNet; Tradescape 1.0; and ECNs. In addition, the author dedicates a chapter to explaining what actually happens after the investor clicks the mouse button to execute a trade. This is the fourth in a planned six-book series on making the transition from online trading to direct access trading.