WHAT IS SelectNet
SelectNet is a term that refers to an automated trading system.
BREAKING DOWN SelectNet
SelectNet is a kind of automated trading system that facilitates electronic trading. A trading system itself is a combination of different parameters that create signals for a specified security. An investor can potentially create their own trading system on various technologies, using different inputs to build their system. SelectNet helps brokers and dealers who are participants in the system by allowing market makers to send orders directly back and forth to one another. It operates with an exchange logic such that when a member receives an order offer, the member can either accept, reject or counter the original offer.
The SelectNet system assists financial markets in running efficiently and quickly. The system also improves liquidity of the overall system, as well as keeping transaction costs at a minimum. SelectNet is not a household name, however, and most individual investors will not recognize SelectNet from financial news sources.
The SelectNet System and Automated Trading Systems
Traders and investors consider SelectNet to be an automated trading system. The system's automation means traders who use SelectNet do not buy and sell their orders manually. Instead, the automated trading system buys and sells the orders when the market meets predetermined criteria. Automated trading systems like SelectNet allow investors to take advantage of market opportunities in real time, and traders find it helpful across market types including stocks, futures, options and Forex.
That said, when using an automated trading system, a trader must have a predetermined trading strategy. Automated trading systems allow for this, helping investors make use of benefits like conditional orders such as limit orders, which allow investors to automatically enter trades at specified levels or times. The investors themselves can enter the specific rules for trades’ entries and exits that the program will later execute. The computer will then monitor the market to find the buying or selling opportunities that fit the specified parameters.
Why Investors Choose Automated Systems
Investors enjoy automated trading systems for various reasons. FOr one thing, these systems minimize emotional trading. The automation allows the investor or trader to keep their emotions in check, using the set parameters to assist traders who suffer from fear in making trades and controlling those who overtrade. Automated trading systems also help the investor interpret data more objectively, and some systems also allow for the price history of securities to be taken into account.