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):
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.