Trading Platform

A set of software's built for trading. Most stockbrokers offer 3 front-end trading software. The desktop application (installable trading terminal), browser-based trading website and Mobile App for trading. This app uses back-end software's like Order Management System (OMS) and Risk Management Systems (RMS) for placing orders to the exchange and managing risk.

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Type of Trading Platforms

Brokers offer two types of trading platforms; an in-house build trading platform and the 3rd party trading platform. Both have their advantages and disadvantages.

1. Vendor Offered Trading Platform

   Most brokers in India use 3rd party trading platform offered by vendors like Omnesys, ODIN, NSE, TradeLab etc. Their platforms are built, hosted and managed by the vendor. The broker rent the software as service.

   Omnesys NEST, ODIN, NSE NOW, TradeLab Pi and Meta Trader are among the popular vendor based trading platforms.

   Advantages

   • The major technology part is outsourced. This enables the broker to focus on its core business.
   • Advance trading feature available.
   • Vendor handle IT infrastructure, security, fail over and many other critical aspects.
   • A low upfront investment allows brokers to compete on pricing and customer service.
   • Easy for the customer to move to other brokers who offer the same trading platform. It reduces the learning curve.

   Disadvantage

   • No competitive advantage for the broker as the same interface offered by many brokers.
   • Implementation of new features is slow as the broker has to depend on the Vendor.
   • If the vendor fails to provide good service, it directly affects the business of the broker.
   • Expensive in long term.

    

2. In-house Trading Platform

   Many of the brokers in India develop their own Trading Platform. It enables the broker to build a customized, powerful, secure and comprehensible Trading Platform. It gives flexibility to implement changes faster. The changes like adding new features; accommodating regulatory requirements and upgrading technology.

   Almost all leading stockbrokers have their own homegrown trading platform. The brokers with their own trading platform are successful in the long term to meet customer requirements. Some example includes ICICI Securities, Sharekhan, Zerodha Kite, HDFC Securities, SBICap Securities, Motilal Oswal etc.

   Advantage

   • Competitive advantage as they have superior trading platform.
   • Quick turnaround of changes in the software.
   • Once the customer gets familiar with the platform they stay with the broker for long time.
   • No dependency on 3rd party vendors. The broker has full control over the offerings.
   • Manage to offer an integrated platform for products like stock and commodity trading, mutual funds, ipo, insurance, loans, margin-funding etc.

   Disadvantages

   • Expensive and difficult to maintain.
   • A focused IT group needed to maintain the software, security, IT infrastructure and resources.
   • It requires huge upfront investment.

Some broker offers both in-house trading platforms as vendor trading platform. This is to attract a wider audience.

Answered on 2019-07-04