Direct access trading (DAT) means trading with a system that allows the order to buy or sell to be sent directly to the market.
The term “direct access trading” is usually used when referring to a NASDAQ Level II trading system like RealTick. With a direct access platform for stocks, a trader needs to select where to route his order. This can be to an exchange, a computerized system known as an ECN (electronic communications network), a market maker, etc.
The stock trader can achieve direct order execution through a direct access broker. Direct access brokers can execute orders much faster than online brokers and that is why they are essential for active traders.
Even though advancements in technology in the late nineties have brought down the commissions of direct access brokers to a level that is comparable to that of online brokers, quality platforms can cost between $300 to $600 a month to use. There are forex platforms that are typically free to use and have execution speeds comparable to direct access platforms for stocks (request a simulator of the one I like here).
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