Understanding Trading Platforms

What is a Trading Platform?

A trading platform is an online trading system that uses computer software to execute transactions in a network environment. The trading platform can be used for free or at a discounted price, depending on the financial intermediary.

With the help of the trading platform, traders and investors can maintain capital accounts and conduct securities transactions in various markets. The ideal trading platform should use a complex structured database to enhance security, information transparency and provide secondary market liquidity.

The web-based environment allows traders to interact satisfactorily, apply appropriate search criteria, and negotiate quotations electronically based on transaction parameters and other terms and conditions to meet the needs of both parties.

Understand the Trading Platform

In essence, the trading platform is a web-based market that provides users with unlimited functions to conduct transactions, browse the catalog of financial instruments, and monitor accounts through financial institutions outside the bank dealer community.

In most cases, the trading platform is equipped with a combination of additional features, such as high-quality research information, real-time quotes, news sources or chart tools to promote the real-time availability of trading information and ensure seamless negotiations between traders.

The trading platform is also tailored to meet the specific needs of specific markets, such as futures markets, stocks, options, or currencies. By providing features tailored to each market structure, the trading platform provides more choices in how to execute and manage transactions.

Types of Trading Platforms

There are two types of trading platforms - proprietary (proprietary) trading platforms and commercial trading platforms.

The proprietary trading platform is designed by a large brokerage firm to imitate the trading style and requirements of the electronic brokerage model.

On the other hand, commercial trading platforms are aimed at retail investors and day traders. The commercial trading platform is easy to use and is bundled with useful features, such as charts and news feeds, to facilitate research and provide investors and traders with more insightful information.

Active trading requires many trading tools and techniques that help point out trends. Choosing the ideal trading platform requires practical experience in active trading.

How to Choose a Platform

When considering picking a trading platform, investors should consider the basic functions and the required fees. This is important because different types of traders need different functions to make trading decisions.

For example, functions such as market depth charts and secondary quotation are essential and necessary conditions for day traders and other short-term traders. On the contrary, tools dedicated to visualizing option strategies are useful to option traders.

In terms of fees as a selection criterion, most traders prefer low-priced trading platforms. A typical example is a trader who adopts a scalping trading strategy. Although lower fees are usually desirable, there are usually trade-offs for consideration in the issuance. For example, a trading platform that costs less but provides only a few features and limited research may not have the advantage.

Other ways to evaluate and compare different platforms are to review various mechanisms, such as feedback ratings and customer reviews; however, it must be remembered that not all reviewers are unbiased or independent.

Other Requirements of the Trading Platform

Some trading platforms may only be available when specific brokers are involved, while other trading platforms may be skeptical of certain intermediaries. This means that the reputation of the broker or intermediary is a factor to be considered before settlement for a particular trading platform.

In other cases, the trading platform may require traders to meet certain qualification requirements before using it. A typical example is that the trading platform of the day requires traders to have at least $25,000 in equity when available in their account. Option trading platforms may require traders to use their platform to trade different option classes with approval.

Cryptocurrency Trading

Bitcoin and cryptocurrencies have been expanding and calling the attention of investors from different fields. But some institutional and wealthy investors do not find the proper platform to securely place their bets in virtual currencies.

Deltix, a provider of algorithmic and automated trading solutions, announced a new platform that would bridge the gap between institutional investors and the crypto market. The platform is known as CryptoCortex. The new venture will be targeting broker/dealers, important exchanges, and institutional firms. All of these enterprises and customers faced very high barriers to enter a highly unregulated market. CryptoCortex will offer a much more convenient alternative. It will boast separate configurations for each of these use-cases.

The product released will provide different tools for broker, dealers and exchanges. Specifically, these customers will have access to FIX and multicast data streaming capabilities, combined with REST and web sockets interfaces. Additionally, to the flexible pricing engine, the presented solution will secure a stable connectivity to more than 15 venues.