The concept of DMA (Direct Market Access), although not a new one is still unknown to many. This process imparts liberty to the traders to directly connect with the exchange order book. Looking at the past scenario, the direct market access was only available to the broker-dealers or the so-called market makers. With the progress in time, the direct market access is now open for the private investors and organizations to gain a monetary benefit out of it.

When online retail brokers make the best possible use of this service, they become the DMA brokers. The classic transaction method relies heavily on these brokers obtaining relevant quotes from the market makers. After cross analyzing the market maker’s quotes, the brokers work out their own quotes. Further, it is the decision of a trader decision whether to move on with the acceptance of the quotation or not.

Qualities that make DMA brokers different

With the evolution of these brokers, traders have the advantage to clinch in their desired level of transaction operations, which further helps in reducing the costs appreciably. The process direct market access imparts liberty to the traders to have a grip on their operations. This freedom is the result of the level of independence a trader receives in managing the transactions and eliminating the unnecessary spread of all those market makers.

When it comes to these brokers, the traders do not have to pay a fixed commission. With these brokers, the traders always can search on for a more significant number of liquidity providers. When the traders use specific strategies in conjunction with the proposal of direct market access, it helps them to make way for a broader perspective. Such traders can now seek success from the international finance markets. Finally, as the process lacks the presence of intermediaries, there are 100 percent chances for anonymity.

An important thing to consider

One thing that the traders need to remember here is that with the process of direct market access, the transactional cost is dependent on the market liquidity. It means that whenever the market liquidity is high, traders are bound to pay a higher transactional price and vice versa. The inter-dependence of the market liquidity and the transactional value thus gets triggered as soon as the counterparty provides a quote.