What does ATS mean in STOCK EXCHANGE

WHAT IS ATS

Alternative Trading System (ATS) is an electronic system provided by broker-dealers, which enable alternative trading in securities. Unlike traditional exchanges that involve the buying and selling of stocks directly from investors, ATS matches prospective buyers and sellers automatically without ever going through a third-party dealer or middleman. Instead of using brokers who act as intermediaries between buyers and sellers, ATS uses computer algorithms to find and match trades based on predetermined criteria such as price, volume, time of day and other conditions set forth by the broker-dealer. This automated process makes it easier for investors to conduct transactions with fewer errors while eliminating potential conflicts between brokers and their clients.

BENEFITS OF USING ATS

The main benefit of using ATS is its ability to provide liquidity to the markets. By providing an additional avenue for buyers and sellers to meet each other’s needs quickly and efficiently, ATS increases overall liquidity in the markets which can help narrow bid/ask spreads for traders as well as make it easier for them to execute large block trades without having to negotiate with several different parties at once. Additionally, since there is no need for human intervention when executing trades through this system, it reduces transaction costs significantly compared to traditional methods of trading where broker fees are inevitable due to their role as intermediaries between traders. Furthermore, since ATS does not rely on any manual processing or input data entry from individuals, it makes it virtually impossible for hackers or cyber criminals who might be looking to manipulate markets or access sensitive information about trades to do so successfully.