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Automated order entry systems streamline the stock market order process by allowing orders to go directly from the investor to the specialist, bypassing intermediaries. This saves time and increases the chances of getting the desired outcome. Different systems, such as DOT and PACE, are used by various stock exchanges worldwide.
Automated order entry system is one of the modern means of facilitating fast order processing in the stock market. In essence, an automated order entry system allows you to initiate an execution of small orders on the trading floor without having to go through the normal process. Here is some information on how the automatic order entry system works and how this electronic system can save you a lot of time.
In the normal order execution process, the order must be received, classified, and then routed to a floor broker. The broker in turn evaluates the request and forwards it to an analyst who acts as the appropriate specialist for the type of transaction requested. Although the procedure is relatively efficient, it takes the investor some time to complete the order at the time of the exchange. The automated order entry system helps streamline the process. Instead of being recorded and then evaluated for proper routing, the order goes directly from the investor to the specialist. This allows the order to bypass execution steps through a floor broker and can significantly speed up order processing.
One of the obvious advantages of the automated order entry system is that time is money when it comes to trading features. By speeding up the receipt of the order by the specialist, the investor has a better chance of getting what he wants, rather than possibly losing because another investor received an order first. Furthermore, the confirmation time is significantly reduced. Since the completion notice goes back directly to the investor and not through any intermediary channel, the task can be completed in a fraction of the time. For a person with a busy day ahead, the automatic order entry system means more time to spend on other issues and less time spent managing investments.
Different models of the automated order entry system are in use with various marketplaces. The New York Stock Exchange uses an automated order entry system called DOT. Short for designated Order Turnaround, the DOT system has proven to be very reliable and receives widespread use on a daily basis. Similar systems are in operation with other stock exchanges around the world. Commonly used electronic ordering systems include models such as PACE, SOES, SOREX, OSS and Auto Ex.
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