: Business-to-business (B2B) trading, often conducted on exchanges, where large investment banks and brokers trade directly with one another, transacting large amounts of securities, and Business-to-consumer (B2C) trading, where retail (e.g. However, in developing economies, especially in Asia, retail trading constitutes a significant portion of overall trading volume. Conversely there is concern about the impact of speculation through trading, considered negatively and of potential significant damage to the real economy. Harris, Larry (March 2013). Investment banks and other dealers have far more complex technology requirements, as they have to interface with multiple exchanges, brokers and multi-dealer platforms, as well as their own pricing, P L, trade processing and position-keeping systems. Exchanges typically develop their own systems (sometimes referred to as matching engines although sometimes an exchange will use another exchange's technology (e.g. Budish, Eric; Cramton, Peter; Shim, John.
Greater liquidity electronic systems make it easier to allow different companies to trade with one another, no matter where they are located. Electronic or scripless trading, sometimes called e-trading or paperless trading is a method of trading securities (such as stocks, and bonds foreign exchange or financial derivatives electronically. Tighter spreads The "spread" on an instrument is the difference between the best buying and selling prices being"d; it represents the profit being made by the market makers. "Life in the slow lane Algorithmic Trading Articles Financial Insight Automated Trader". Retrieved July 8, 2012. While the FIX Protocol was developed for trading stocks, it has been further developed to accommodate commodities, 9 foreign exchange, 10 derivatives, 11 and fixed income 12 trading.
Exchange trading would typically happen on the floor of an exchange, where traders in brightly colored jackets (to identify which firm they worked for) would shout and gesticulate at one another a process known as open outcry or pit trading (the exchange floors were often. The Chicago Board of Trade (cbot) produced a rival system that was based on Oak Trading Systems Oak platform branded E Open Outcry, an electronic trading platform that allowed for trading to take place alongside that took place in the cbot pits. 5 This allowed access to a variety of financial markets such as treasuries, foreign exchange and commodities. The increase of electronic trading has had some important implications: Reduced cost of transactions By automating as much of the process as possible (often referred to as " straight-through processing " or STP costs are brought down. "The High-Frequency Trading Arms Race: Frequent Batch Auctions as a Market Design Response". They can include various exchange-based systems, such. Hedge funds, fund managers or insurance companies, trading far larger amounts of securities) buy and sell from brokers or "dealers who act as middle-men between the clients and the B2B markets. The Budapest stock exchange and the Moscow Interbank Currency Exchange use automated trading system originally written and implemented by fmsc, an Australian technology company that was acquired by Computershare, and whose intellectual property rights are now owned by OMX ). Floor trading, Journal of Finance volume 60, issue 6,. Many retail (or "discount brokers (e.g.
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