posted on 06-06-2019

Direct Access Trading (DAT)

Updated August 7, 2020

What is Direct Access Trading (DAT)?

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

How Does Direct Access Trading (DAT) Work?

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 Does Direct Access Trading (DAT) Matter?

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.