Direct access trading (DAT)

DAT is trading by sending your day trading buy and sell orders directly to the market, rather than via a broker. When people talk about "direct access trading" they usually mean a NASDAQ Level II day trading system (e.g. RealTick). With a direct access day trading system, a day trader can choose how to route an order. This is either an exchange (e.g. CME) , a computerised system(an ECN or electronic communications network), or a market maker (a 'big' player). The day trader can also send direct orders through a direct access broker, who can execute orders much faster than online retail brokers. As you can imagine, this day trading speed is essential for day traders who are day trading or using short-term trading styles. You can expect to pay more for a direct acces broker than you would for a standard online retail trading account. Spread betting firms supplying day trading facilities usually charge no commissions, relying on the 'spread' (the difference between the bid and the ask) to make their profit.