You can trade stock, and also other financial products, by a variety of trading methods such as floor trading and online trading. The online trading facility provided by online brokers have given new horizons for stock trading, it is simple, fast and trouble-free. But with time even the online trading was proven not so adequate for many traders such as day traders and scalpers. So Direct Access Trading (DAT) was introduced. It enabled stock traders to access level2 market depth and execute their trades with less than a second delay. Direct access stock trading is simple with cheaper execution fees, and does not require any broker assistance.

Direct access stock trading is a fully automated trading procedure, which wholly depends on electronic networks; that's the name Electronic Direct Access Trading (EDAT). A trader executes his or her trades through a trading platform, popularly day trading system, installed on his or her computer. Through this platform, the trader can monitor level2, in some systems level3, market data such as ask and bid prices, trades completed recently, order sizes, market makers involved, etc. in the form of graphs or alerts. The trader can choose his price and by clicking on that he or she can begin the trade.

In direct access stock trading the traders can trade desired number of stocks or a default number of stocks. He or she can also choose the market maker to which the order should be routed. The automated trading system of the market maker then matches this order with others and executes the trade. The whole process is so fast that the results can be seen instantly; and the trader can spend more time on picking the stock. As there is no human interference once the order is placed, it is the trader's responsibility to make the trade a profitable one.

Direct access stock trading is much cheaper than other forms of stock trading. But it is not for everyone; you have to satisfy certain account minimums and activity minimums. The direct access brokers also charge certain platform fees for using their trading systems, which also depends on your trading activity and trading volume. That is where direct access stock trading favors stock day traders; they trade more frequently in higher volumes. Also DAT brokers offer much more leverage than others, minimizing the need of huge initial capital investment. Most direct access brokers completing 50 or more trades per month usually will not have to pay any platform fee. Also remember most direct access brokers charge inactivity fees on infrequent traders.