Equities Trading of Dhaka stock exchange (DSE)
Trading System :
Fully Computerized Trading System
The DSE has operated fully computerized trading since April 1991, through the "Automated System for the Stock Exchange of Thailand", or ASDSE, which enables trading to be efficient, equitable and fluid. Foreseeing the needs to respond to rapidly changing business demands and to accommodate the trends in financial processes in the world markets, DSE has upgraded to the new trading system called "Advance Resilience Matching System" or "ARMS" in August 2008. ARMS also features higher risk management efficiency and improved system redundancy.
Two Trading Methods:
- Automatic Order Matching (AOM) Trading
AOM trading performs the order matching process according to price, then time, priority, without human intervention. After brokerage houses electronically send buy or sell orders from their offices to the DSE mainframe computer, the ARMS system queues the orders and arranges them according to a price-then-time priority. This means orders are first grouped according to price, with the best price taking precedence. Then, within each price group, orders are arranged according to time. In terms of the matching process, there are two methods: continuous order matching and call market method.
Continuous Order Matching procedures operate during the regular trading sessions. The ARMS continuously matches the first buy and sell orders in the queue, and at the same time, confirms each executed transaction via the member's (broker's) terminal.
The Call market matching is utilized in calculating the opening and closing prices of a security at the opening and closing of the trading hours. This method allows brokers to enter their orders to be queued for matching at a specified time at a single price that generates the greatest trading volumes for that particular stock.
- Put Through (PT) Trading
The ARMS also allows brokers to advertise their buy or sell interests by announcing bid or offer prices. Members may then deal directly with each other, either on behalf of their clients or for themselves. Prices may be adjusted during the negotiation; hence, the effective executed price may not be the same as that advertised and may not follow the price spread rules. After concluding negotiations, dealers must send details of the result(s) to the ARMS for recording purposes.