Role of a Trading Room on Stock Exchanges

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The term trading room or trading floor, is modeled in an auction format, the trading platform is also symbolical of the financial market. Traders are required to provide quick response service to their clients and communicate simultaneously on multiple issues.

They make use of computer screens simultaneously, usually between three and six, with the help of information and news on different market trends.

Commands and transactions are managed through a dedicated keyboard. Available to traders are many and varied sources of information which necessitate the need for switching systems and sharing specialized resources through advanced software systems.

Additionally, voice communication and body language enables a trader to hold multiple conversations simultaneously. The trader will be in a position to give and receive sound information, and also provide immediate responses to customers

The latest technology is implemented to enhance the effectiveness of these markets. To the merchant, ability to control all sources of information through a smart interface raises the trade experience. And in addition to branding, the specialized keyboards display visual information, and comes with dedicated keys such as “buy” and “bid” among others.

Modular systems allow expansion as well as give traders access to information sources. The switching system enables the user to place all servers and PCs in a separate room closer to the transactions room, thus reducing noise and heat from the large amounts of computing equipment.

With program trading, orders are rendered through a software program rather than being ordered by a trader. It is also known as algorithmic trading, it works with organised markets whose transactions are not reliant on verbal negotiations.

The tables called turrets allow a free seating system for traders through the use of username and password. Every position has at least two tubes and one head, and comes with a touch screen that allows quick customer response and easy to use advanced operational options.

An investment bank’s distinctive room differentiates between traders, who tender the better prices by predicting market movements, and market-makers negotiate in a wholesaler fashion.

A trading-room conducts trading, and arbitrage, which pertains to transactions involving investment banks and brokers. While portfolio management functions involves asset management companies and institutional investors. Trading rooms were first assembled by investment banks, after which the large asset-management firms followed suit.

On another level, banking regulation strips traders the power to reassess their positions in a manner they so choose. And criticism of prices set by traders for sophisticated instruments is not usually forthcoming particularly from the back office staff.
 

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