Direct Access Execution: ECNs, SOES, SuperDOT, and Other Methods of Trading [Hardcover]

Simit Patel (Author)

Book Description

Series: Direct Access Trader | Publication Date: April 23, 2001

Direct access trading means a whole new world of trade execution. Gone are the tradition-bound days of calling a broker, who called a broker, who called the floor of the exchange, where the order was written by hand and delivered by a runner to the floor broker. This was a time-consuming, tedious task that almost certainly guaranteed poor fills. Now, direct access traders can place an order with the click of a mouse button and be filled within seconds, eliminating the middleman and lowering commissions and reducing the infamous "spread". A direct access trader now has many avenues to place a trade: ECNs, SOES and SuperDOT, among others. "Direct Access Execution" walks the reader through the different methods of executing a trade and helps them understand which one to use and when. Each method of executing a trade has its own unique advantage and disadvantages. This book explains when to use each method to capitalize on the advantages of each. After reading "Direct Access Execution", the reader should understand the fundamental differences between all the methods and it allows the reader to easily navigate between them and find the best prices for executing a trade. The author covers in detail: SuperDOT; SOES; SelectNet; Tradescape 1.0; and ECNs. In addition, the author dedicates a chapter to explaining what actually happens after the investor clicks the mouse button to execute a trade. This is the fourth in a planned six-book series on making the transition from online trading to direct access trading.

Editorial Reviews

From the Back Cover

Direct Access Order Techniques to Get Virtually Immediate Trade Execution­­and Eliminate Costly Trading Delays and Errors

Direct access traders control their own destinies. By watching the real-time trading action unfold on their computer screens, they get the price they want, receive instant trade confirmation, and dramatically reduce their commissions. Yet before they can truly maximize their profits, E-DAT traders must understand the key avenues of trade execution, and when to use each for the greatest impact.

Direct Access Execution walks you through the different techniques you can use to execute an E-DAT trade­­and describes when, why, and how to use each technique for maximum profit and risk protection. Look to this unique combination of in-depth reference resource and hands-on user's manual for information on:

• SelectNet, SuperDot, SOES, and more­­plus techniques to capitalize on the strengths of each
• When and why to use electronic communications networks (ECNs) versus NYSE or Nasdaq
• All about investment portals­­considered by many to be the future of E-DAT

The Direct Access Traders Series shows you how to harness the power of today's financial technologies­­whether you make 2 trades per year or 2000. Other books in the series include:

• Understanding Direct Access Trading
• Mastering Direct Access Fundamentals
• Tools for the Direct Access Trader
• Trading Strategies for Direct Access Trading
• Technical Analysis for Direct Access Trading

"This book will serve as a stepping stone toward enabling you to gain direct access to the financial marketplace. You will be provided with fundamental investment information, and information regarding how investment is changing for the better. By the end of this book, you should be capable of determining how you can optimize your investments through these new changes."
­­From Chapter One

Electronic direct access trading (E-DAT) is helping independent investors increase their trading profits while taking control of their own destinies. Direct Access Execution tells you about the most basic, yet crucial, tools of E-DAT­­the systems and networks you use to execute trades. Concise, to the point, and filled with hands-on information, this book shows you how to execute your trades with the speed and precision of a billion-dollar institutional investor, even when you're looking to scalp only a few hundred dollars from a momentary price surge.

From how to choose the best ECN for your trading style to which innovative products can help you place the most advantageous orders on the NYSE and Nasdaq, Direct Access Execution will strengthen your understanding of the major techniques for executing E-DAT trades. All the tools and resources you need are covered, including:

• Strategies to find the direct access provider that best fits your trading style and resources
• An informative, easy-reference Q&A section covering all aspects of execution methods
• Techniques to get into the turbulent­­but potentially profitable­­marketplace of IPOs and futures
• Web site addresses for ECNs, E-DAT firms, and exchanges; trading software and services; up-to-the-minute research and news; and much more

Success at direct access trading requires speed and knowledge. Let Direct Access Execution show you where to go to get the best of both, and provide you with battle-proven tips for maintaining your edge in the most turbulent markets, sidestepping the traps of market makers and other traders­­and adding to the profitability of every on-screen trade you place.

About the Author

Simit Patel is currently an investment banking associate at InternetFundManager.com. Previously he worked at Periscope Analytics as an equity analyst. He is a graduate of the Stern School of Business at New York University.

Product Details

• Hardcover: 196 pages
• Publisher: McGraw-Hill Companies; First Edition edition (April 23, 2001)
• Language: English
• ISBN-10: 0071363912
• ISBN-13: 978-0071363914
• Product Dimensions: 9.3 x 6.5 x 0.8 inches
• Shipping Weight: 1 pounds
• Average Customer Review: 2.5 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #3,447,503 in Books (See Top 100 in Books)

More About the Author

Simit Patel is the founder and central banker of the InformedTrades.com community. He has over 10 years of experience in the foreign exchange and precious metals industry, trading all timeframes utilizing an approach combining global macroeconomic analysis and price action-based technical analysis.

Customer Reviews

Most Helpful Customer Reviews

8 of 8 people found the following review helpful:

1.0 out of 5 stars Could not be worse, June 13, 2002

By A Customer

This review is from: Direct Access Execution: ECNs, SOES, SuperDOT, and Other Methods of Trading (Hardcover)

...

I honestly do not know what the author is talking about. In every chapter he just beats about the bush without providing any useful information.

If it is a chapter on Tradescape (the title of the chapter is actually Tradescape) - the author provides a snapshot of the screen and goes on talking in general terms about investment portals, ECNS, their usefulness, price consideration, history, anything except how to use Tradescape.

If it is chapter on SOES - it does not have any reasonable description of how it works and what to do with it from either technical or trading perspective. The only two pieces of information which are provided in the chapter on SOES are completely wrong - i.e the book says that the maximum number of shares in SOES transation is 100 when it is actually 1000. 5 minute rule is also interpreted incorrectly - the author does not explain that the transactions in the opposite direction are allowed within 5 minutes (i.e buy after sell or sell after buy).

I did not find a picture of Level II screen in the whole book. How can one possibly talk about SOES, SelectNet, SuperDot, ECNs without even showing what information is available on Level II.

What a piece of junk!

2 of 3 people found the following review helpful:

2.0 out of 5 stars Trust Me: Keep Shopping!, April 23, 2002

By A Customer

This review is from: Direct Access Execution: ECNs, SOES, SuperDOT, and Other Methods of Trading (Hardcover)

This book has two problems: First, it's out-dated and second, Mr. Patel writes in a sophmoric, anecdote-ridden style.
If you're really looking for a practical guide to direct access service providers and markets, I suggest you contact the research departments of your local full-service brokerage firm and ask for industry reports on the subject. There's several firms that have published 20-65 page reports that explain every point of a direct access trade* from start-to-finish.
Save your money, and pass on this one.

* direct-access service providers, broker/dealer, clearing, markets & market systems, etc.

5 of 8 people found the following review helpful:

5.0 out of 5 stars a real heartbreaking work of staggering genius, December 9, 2003

By A Customer

This review is from: Direct Access Execution: ECNs, SOES, SuperDOT, and Other Methods of Trading (Hardcover)

like all the black girls at the office say: "Simit? Uhhh, he so fine" ...and, really, thats how I feel about this book. It so fine. I am looking forward to the follow-up called Indirect and Unaccessable Execution: SuperDOT my ass!.