Trading software for retail brokers
Electronic trading platforms typically stream live market prices on which users can trade and may provide additional trading tools, such as charting packages, news feeds and account management functions. Some platforms have been specifically designed to allow individuals to gain access to financial markets that could formerly only be accessed by specialist trading firms.
They may also be designed to automatically trade specific strategies based on technical analysis or to do high-frequency trading. Transactions have traditionally been handled manually, between brokers or counterparties.
However, starting in the s, a greater portion of transactions have migrated to electronic trading platforms. These may include electronic communication networks , alternative trading systems , " dark pools " and others. The first electronic trading platforms were typically associated with stock exchanges and allowed brokers to place orders remotely using private dedicated networks and dumb terminals.
Early systems would not always provide live streaming prices and instead allowed brokers or clients to place an order which would be confirmed some time later; these were known as ' request for quote ' based systems. Knight Capital was trading blocks of Exelon common stock at a rate as high as 40 trades per second — and taking a 15 cent per share loss on each round-trip transaction.
As one observer put it: They may get at least a partial reprieve. The NYSE will reverse trades in six stocks during the time period when the prices were at least 30 per cent outside the normal trading range for the stocks. I find it hard to believe that the software was so faulty that it could just go into berserker mode and start wildly trading.
In short, plenty of blame to go around. But apportioning blame will have to wait until the forensics are complete. Then will come the lawsuits, settlements, high-level blue-ribbon commission hearings, and, finally, the insider tell-all books.
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