Technology Behind Electronic Trading Systems

1
Technology Behind Electronic Trading Systems
2
Online Trade

• Web Platform
• Instant investment
• Multiple order
• Competitve pricing
• Example
• E-Trade www.etrade.com 4.3 million accounts

3
On-Line Trade Technology

• ECN and SOES
• computerized networks that enable investors to
  place bid/sell prices off-exchange market
  (offsite).
• Off site In-house
• On site NYSE (New York), TSX (Toronto)

4
ECN V.S. SOES

• ECN
• -large scale trade organizations
• SOES (Small Order Execution System)
• -small scale trade individuals
• -restriction
• less than 1000 share
• Less than 250 per share

5
Over internet Protocol iKP and STT

• iKP (Internet Keyed Payment Protocol)
• 1995 by IBM
• Account transfer-based
• Key encryption
• STT (Secure Transaction Technology)
• 1995 by Microsoft and VISA
• Credit card -based
• Many others. SEPP (Late 1995), SET (1996)

6
Security and Privacy

• Personal Information Protection and Electronic
  Documents Act (PIPEDA)
• Personal information must keep private
• Properly disclose information for some instance
  open brokerage account, bank accountetc
• Disclose information without permission under
  special condition (need information to save ones
  life, save countryetc)

7
Electronic signature

• Under PIPEDA Part 2
• Widely used these days
• Formalize electronic documents
• Different definition and legal requirement in
  different places