Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Direct Access Trading (DAT)

What it is:

Direct access trading (DAT) refers to any computerized trading system which connects traders to markets, thereby eliminating the need for a broker.

How it works (Example):

Direct access trading (DAT) encompasses a variety of electronic trading tools and platforms which connect traders with other traders and with the actual markets (e.g. New York Stock Exchange (NYSE) and Nasdaq). These tools and platforms are computer-based and function on large high-speed networks.

Why it Matters:

As a computer-based trading tool, DAT software is conducive to home-based usage on a personal computer with internet access. Moreover, by eliminating the need for brokerage involvement, DAT greatly reduces the transactions costs associated with trading. For this reason, DAT has become widely used by high-volume and day traders.