Direct market access describes a trading pattern which involves, a trade been placed online by you, and then your order is forwarded directly to the stock exchange for execution. You may be amazed to find out that this is not how online trading always works, but as a matter of fact DMA has only been made available for retail investors for a short period of time. In most markets, a large number of brokers don’t make use of it.
In the ancient way of placing a trade, you send an order to your broker by making use of a telephone and a then requests a quote from the market maker for that order. A market maker is a firm that is always ready to buy Or sell a stock: Its quote displays both a bid price and an offer price at all points in time and an aim to make profits from the difference between both of them. This difference is called the bid/offer spread or the bid/ask spread.