Saturday, November 24, 2012

What Is Direct Market Access in Spread Betting?


The approach and access of most traders nowadays are easier, more convenient and open than what it has been long time ago. This is because there are already so many financial venues and platforms nowadays that can offer opportunities and possibilities for different financial markets in an instant manner, which is non-existent, even in the past 20 years. Aside from that, the growth of the retail financial investment platform has also been incredible in the past years, through the help of various pioneering financial instruments like the contracts-for-difference or CFD.

Among the biggest and most innovative developments in the field of CFD trading is the growth of direct market access or DMA. This allows traders to put their trading decisions personally, regardless of the size and level of the trade. In other words, as its name suggests, DMA is a platform that allows investors and traders to directly participate and access the market.

The usual and conventional financial trading takes place by placing a position through a broker. This relationship and way of trading through a broker is a contract with two (2) parties, which isolates the markets first. Of course, the value of the position still depends on what will happen to the market. However, the contract is primarily between the trader and the broker and does not involve the movements in the market yet. Aside from that, traders do not get to touch the market position at all. This is because, by proxy, the broker is the one who has the direct contact and involvement to the market.

However, with DMA, traders can do it on their own, monitor the developments of the market on their own, as well as put trading positions on their own. Well, this is because with this innovative platform, they can already access their positions through the use of the internet, without necessitating for the trader to go to the stock exchange market place or other platforms, just to make a position on their trade.

With the foregoing, the advantage of DMA to CFD trading is not just the accessibility of the market. This is because aside from that, there is something else that really helps traders in making their positions. One good thing here is the transparency of the price, if traders will compare the price from the DMA to the quote of the broker, there will surely be a variance. Well, this is the good thing about being open to the market in a direct manner. Consequently, this allows traders to buy or even sell this instrument in the optimal price in the market. This is way better than accepting prices of brokers that are usually higher and clipped. Hence, traders can really save money from this platform while having the chance to earn.

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