Cash market Equities, Exchange Traded Options, Interest Rate securities and Warrants are traded on a screen based trading system called ASX Trade. Brokers have terminals in their office from which they can view the market, and execute trades.
ASX Trade is a NASDAQ OMX ultra-low latency trading platform based on NASDAQ OMX's Genium INET system.
Why was the screen based trading introduced?
An important change brought about by screen based trading is the switch to an order-driven market where the prices on the screen represent firm orders submitted by traders.
Until screen based trading commenced operation on 31 October 1997, options were traded on a system of open-outcry on the trading floor. Under the open-outcry system, traders provided quotes that were merely indicative, and which could not be dealt on until both parties agreed to trade.
The move to the order-driven screen system means that trades are now executed automatically on a price/time priority basis.
How does ASX Trade work?
Orders are entered into a Participant's ASX Trade terminals and transmitted to the market via the ASX's host computer which in turn are seen by all Participants' terminals.
Orders are then executed on a price and time priority basis. Execution is performed by responding to a bid or offer that appears on the ASX Trade screen in the current market.
Who uses ASX Trade?
ASX Trade links brokers across Australia through screens in Participants' offices. ASX Trade is operated in each Participants' office by a Designated Trading Representative (DTR).