Automated order entry systems streamline the process of stock trading by allowing orders to go directly from investor to specialist, reducing confirmation time and increasing the chances of getting desired results. Different models, such as DOT, are used in various markets.
The automated order entry system is one of the modern means of facilitating quick order processing in the stock market. Essentially, an automated order entry system makes it possible to initiate a small order run on the trading floor without having to go through the usual process. Here is some information about how the automated order entry system works and how this electronic system can save you a lot of time.
In the normal order fulfillment process, the order must be received, sorted and forwarded to an intermediary. The broker, in turn, evaluates the request and forwards it to an analyst who acts as an appropriate expert for the type of transaction requested. Although the procedure is relatively efficient, it takes some time from the initial request by the investor to the completion on the trading floor. The automated order entry system helps streamline the process. Rather than being logged and evaluated for proper routing, the order goes directly from investor to specialist. This allows the order to bypass the execution steps of a floor broker’s hands and can greatly speed up order processing.
One of the obvious advantages to the automated order entry system is that time is money when it comes to trading functions. By accelerating the specialist’s receipt of the order, the investor has a much better chance of getting what he wants, rather than possibly losing out because another investor received an order first. Furthermore, the confirmation time is considerably reduced. As the notice of completion is sent directly to the investor and not through intermediary channels, it is possible to complete the task in a fraction of the time. For a person with a busy day ahead of them, automated order entry means more time to devote to other issues and less time spent dealing with investments.
Different models of the automated order entry system are in use in various markets. The New York Stock Exchange uses an automated order entry system called DOT. Short for response to designated order, the DOT system has proven to be very reliable and receives widespread use on a daily basis. Similar systems are in operation with other exchanges around the world. Commonly used electronic ordering systems include models such as PACE, SOES, SOREX, OSS, and Auto Ex.
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