Electronic Trading Platform

Electronic Trading Platform

Electronic trading platforms are computer software programs that can be used to order financial products through networks with financial intermediaries, also known as online trading platforms. Various financial products can be traded by trading platforms, through communication networks with financial intermediaries or directly between participants or members of trading platforms. Products such as stocks, bonds, currencies, commodities, derivatives, and others, with financial intermediaries, such as brokers, market makers, investment banks, or stock exchanges. Such a platform allows electronic commerce to be carried out by users from any location and is different from traditional floor trading using open protest and telephone-based trading. Sometimes the term trading platform is also used referring to trading software only.

Several platforms have been specifically designed to enable individuals to gain access to financial markets that were previously only accessible by specialist trading companies. They can also be designed to automatically trade specific strategies based on technical analysis or to carry out high-frequency trading. The electronic exchanging stage streams direct market costs where clients can exchange and can give extra exchanging devices, for example, diagram creation bundles, news channels, and record the board capacities.

Etymology

Generally the term 'trading platform' is used to avoid confusion with 'trading systems' which are more often associated with trading methods or strategies than computer systems used to execute orders in financial circles. In this case, the platform is used to mean a type of computing system or operating environments such as a database or other specific software.

Historic developments

Transactions have traditionally been handled manually, between brokers or opposing parties. However, starting in the 1970s, most transactions have migrated to electronic trading platforms. This may include electronic communication networks, alternative trading systems, "illicit gatherings" and others.

The first electronic trading platform is usually associated with the stock exchange and allows brokers to place orders remotely using private networks and stupid terminals. The initial system will not always provide live streaming prices and instead allow brokers or clients to place orders that will be confirmed sometime later; this is known as a 'bid request' based system.

Trading systems have evolved to allow live streaming prices and almost instant order execution and use the internet as a basic network which means that location is far more relevant. Some electronic trading platforms have built scripting tools and even APIs that allow traders to develop automated or algorithmic trading systems and robots.

The client graphical user interface of the electronic trading platform can be used to make various orders and is also sometimes called a trading tower (although this may be an abuse of this term because some refer to the PBX telephone specifically used by traders).

During the period 2001 to 2005, the development and proliferation of trading platforms witnessed the establishment of a special online trading portal, which is an electronic online venue with a choice of many electronic trading platforms rather than being limited to the offer of one institution.