Direct AccessTrading & Day Trading

DAT (Direct Access Trading) is day trading by sending your buy and sell trade orders directly to the stock market, rather than via any particular brokerage. What people mean by "direct access trading" is a Level II day trading system (such as "RealTick" for example). Using a direct access day trading system, a day trader can choose exactly how he wants to send an order to market.

This is either to an exchange (e.g. NYSE or CME) , a computerised order matching system (an ECN standing for "electronic communications network"), or one of th eregular market makers ('big' players who are contractually obliged to 'make a market' in certain stocks). The day trader can also, if he wishes, send orders straight through a direct access broker, who can execute those trading orders much faster than your average online retail brokerage.

Speed when day trading is essential - day traders who are day trading or using short-term trading styles need to be in and out, often within minutes, and a bad fill can make the difference between day trading profit and loss. You will pay more for a direct access than you will for an ordinary online retail trading account. Spread betting firms supplying day trading facilities make their money from the spread, so don't charge extra.