Direct market access

<p>Direct market access (DMA) in <a href="/facts/Financial_markets/T8g8qFT5">financial markets</a> is the <a href="/facts/Electronic_trading/UtfA0MLm">electronic trading</a> infrastructure that gives <a href="/facts/Investor/JEVPRsyV">investors</a> wishing to <a href="/facts/Trade_(financial_instrument)/3ACTHbqp">trade</a> in <a href="/facts/Financial_instruments/2d93t6Ya">financial instruments</a> a way to interact with the <a href="/facts/Order_book_(trading)/h1pEaykI">order book</a> of an <a href="/facts/Exchange_(organized_market)/NTwgFnBD">exchange</a>. Normally, trading on the order book is restricted to <a href="/facts/Broker_dealer/W8fLBuKM">broker-dealers</a> and <a href="/facts/Market_maker/7v05Fsa3">market making</a> firms that are members of the exchange. Using DMA, <a href="/facts/Investment_company/dQC7HBhr">investment companies</a> (also known as <a href="/facts/Buy_side/EWRbCmtR">buy side</a> firms) and other private <a href="/facts/Trader_(finance)/51aRSyLA">traders</a> use the <a href="/facts/Information_technology/glMzunwe">information technology</a> infrastructure of <a href="/facts/Sell_side/yW3rBwtF">sell side</a> firms such as <a href="/facts/Investment_banking/WcxWICfI">investment banks</a> and the market access that those firms possess, but control the way a trading transaction is managed themselves rather than passing the order over to the broker's own in-house traders for execution. Today, DMA is often combined with <a href="/facts/Algorithmic_trading/GagwN2Bs">algorithmic trading</a> giving access to many different <a href="/facts/Trading_strategy/uvx5KXl4">trading strategies</a>.  Certain forms of DMA, most notably "sponsored access", have raised substantial regulatory concerns because of the possibility of a malfunction by an investor to cause widespread market disruption.
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Direct market access open-in-new

Direct market access