Difference between Sponsored Access(SA) and Direct Market Access (DMA)

May 29, 2012
 Like in Direct Market Access (DMA), in Sponsored Access (SA), the brokerage firms offer the client with the market participant identification to connect to the exchange.
However, the main difference between DMA and SA are :
  1. In Sponsored Access (SA), the client does not use the infrastructure of broker like it does in case of Direct Market Access(DMA).
  2. In SA, the client does not use the pre-trade risk management as provided by the broker unlike in DMA where the client uses the pre-trade risk management provided by the broker. 

Direct Market Access (DMA)

May 29, 2012

In DMA (Direct Market Access) the orders from the client are not interrupted by the broker and are sent to the exchange directly. The broker’s infrastructure is used for this. The brokers can perform pre-trade analysis for the client orders. Even though that happens before the order gets placed on the market, it does not necessarily need human interruption. Hence, the name DMA.

Sell side

May 29, 2012

Sell side firms are generally investment banks who are members of the exchange. They are allowed to trade on the exchange directly. They take orders from the “buy side” firms and place them in the market. They are the brokers in the equities business.

Reference :

  1. Wikipedia

Buy Side

May 29, 2012

Buy side firms are generally asset management companies, hedge funds or private equity firms who buy shares from the market.

Reference :

  1. Wikipedia

Laws of Commercial Semantics by Curt Monash and its implications on newcomers

May 26, 2012

Being new to the industry, I get to encounter a lot of new terms in everyday life, mostly related to domain that I work in. Every new terminology comes with a perception and history behind it. So, the outright challenge that I face is to understand what exactly it means and what the person using that term is trying to convey by using that term. Coming from a Computer Science and Mathematics backgroud, I have been used to a world where everything is precise and tends to be as well defined as possible with the help of equations. However, when it comes to language this where it gets much more interesting because language is always dynamic.

I understood the acuteness of the problem, when I was irritated by the random usage of algorithmic trading and high frequency trading. Another name which kept me busy for quite sometime was SOA(Service Oriented Architecture). Which software systems qualify as examples of SOA and which don’t always used to be confusing. I still don’t know whether I understand it or not :O. A similar area of hot discussion is in the names Complex Event Processing and Event Stream Processing. To the first listener it sounds cool and fashionable. However, its difficult and vague when you try to figure out what qualifies as “complex” and what doesn’t. All these examples substantiate Curt Monash’s third law, which says, “No market categorization is ever precise”.

What I realized is that every industry(finance and technology being the ones I have been involved in) has its own jargon. As the old chinese saying goes “I hear and I forget; I see and I remember; I do and I understand”, its best to understand by actually work. However, I have realized that its not possible at any particular time to do everything that you may want to. So, getting the names correct becomes important because of the history of the work and perception associated with that name. Another Chinese proverb which has influenced me a lot in this case is “The beginning of wisdom is to call things by their right names” .And I think that the names of things are always evolving and the beauty is to understand this evolution.

References :

The three laws of Curt Monash are :

  1. Bad jargon drowns out good.
  2. Where there are ontologies, there is consulting.
  3. No market categorization is ever precise.

You can read about them in more details here.

Missing Value Treatment Techniques in Matlab

May 23, 2012
  1. NAN
  2. Interpolation
  3. Extrapolation

Useful Screen Commands

May 22, 2012

screen -list : display a list of all the screens
screen -r : reconnect to a screen
screen -x : reattach to a screen that is already attached
C-c – Create a new screen window
C-n – shift to the next screen
C-p – shift to the previous screen

C-a C-w – see the list of windows connected to this screen