The Complete Guide to Trade Order Management System

4 years ago

An order management system is a software system that facilitates and manages the execution of trade orders. In the financial markets, an order must be placed in a trading system to execute a buy or sell order for a security.

Why do you need a Trade Order Management System?

Many times, brokers receive trades on their desk and log these trades in their own brokers order management system. Now the question is how do you know that the trades have been completed? Also, traders consume maximum time in deciding which trades would be kept open and which ones would be closed out. Needless to say an order management system can assist traders in all these aspects.

This article attempts to explain about key modules of an order management system, it features a look at the features of an order management system. You are also presented with the benefits of using an order management system.

Key Features of an Order Management System

An order management system allows traders to operate faster while overcoming organizational problems faced in the chaotic trading environment. An order management system offers these features:

• Database of Customers, Traders, and Reports

A database of customers traders and reports is an important aspect of the management system. It helps traders in marketing and also in customer care. It becomes easier for traders to create marketing strategies by using the database. Traders can have a data archive of customers. They can come up with ideas on how to better serve customer’s needs.

• Order Execution

The order management system ensures that all orders executed are logged and the trader’s image is maintained. The order management system maintains a record of all the trades executed by traders. This feature is possible because of the use of a database. The data helps in planning for better strategies.

• Orders Clearing and Settlement

The order management system maintains a record of all transactions performed by a trader. As the system maintains a record of all transactions, it is easier to track the progress of a transaction. It is easy to keep track of all the money owed and all the money paid out to traders. This ensures that the money paid out does not exceed the money received.

• Export Reports

Reports are a vital aspect of an order management system. Exports are reports from the management system that are printed and expensed to the clients. Exports include reports of trade activities, statistics, and other trade reports.

• Statistics and Reports Management

Reports are used by traders in order to figure out how their operations are doing in terms of profitability and sales. Reports are used by traders to keep a track of how well their operation is doing.

The Benefits of an Order Management System

• Increased Profitability

Traders get better results when they use an order management system. They are able to cut down on operating expenses. The system automatically controls costs as the traders can quickly spot high performing trades and operations.

• Improved Customer Care and Marketing

It is easy for traders to have customer care and marketing strategies with the use of an order management system. They are able to track all trade queries made by customers. As a result they can provide timely replies to customers.

• Enhanced Production

An order management system enables traders to improve their production techniques. The system easily tracks the statistics and reports of trade activities and keeps a consolidated record. The traders are able to monitor the performance of their operations and the effectiveness of their production methods.

• Risk Management

The system allows traders to manage their risk easily. Once a trade transaction is logged in, the system uses risk management module which allows the trader to stop unprofitable trades and potentially risky trades. The use of risk management objectives helps traders in maximizing profits while minimizing losses.

There are many more benefits that one can gain from the use of a trade order management system. An order management system is great for traders as it helps them in making intelligent decisions. It is vital that traders use such systems as it makes their trading experience better.

How to pick the right Trade Order Management System?

You have decided to go ahead and create your own Trade Order Management System but you don’t know how to fulfill the need. There are several things to consider when you are deliberating on which one to choose. Here are some of the things.

Trade Systems’ Portfolio

One of the things to look into is the portfolio of the company that you are choosing in building your own Trade Order Management System. If the company has a good portfolio, then they will be able to give you quality output. A good portfolio of previous works of the company will make you easier in choosing which one to go for.

Before you hire a company to create your Trade Order Management System, make sure you get a portfolio of previous work and samples.

The Price

The price is also an important consideration when deciding which Trade Order Management System to go for. The price structure may vary from company to company, but as much as possible make sure that you can afford the price. If it is out of your budget, perhaps look for another company to hire. In the same way, if you will not be able to pay the amount you had agreed on, then most probably you will not continue the project. As much as possible, get prices you can afford.

The Price Structure

When you try to negotiate with a particular company, also discuss with the company the price structure of the project. Price structure may affect the overall cost of the project. The price may change if the time frame of the project will increase or if it is extended. Every project has its price and as much as possible you have to agree to it.

Process Methodology

Make sure you get to know the process that the company uses to produce the Trade Order Management System. As much as you would like to know which one of the methodologies, there are certain factors to consider. The methodologies used may determine the cost of the project and as much as possible the company should be able to come up with a process that is within your budget. If the company uses a process which does not really fit your budget, you may not have the money to hire them.

Other Consideration

You may want to create your own Trade Order Management System but there are a few things to consider. Make sure you get to know the team that will be working on the project. It is best if you can see a staff of highly trained engineers if you are going to have a high-complexity project. You will also want a team of experts to handle your project and the company you will pick should be able to sufficiently deliver.

How to Build the System?

You may wonder how you will create a Trade Order Management System if everything is digital today. It is very simple as long as you know what you want. If you already have an idea on what you want the system to do, it will be easier for you to build one. Here are some steps for you to consider.

Check the Requirements of the System

Make sure you check the system requirements of your system. When developing a Trade Order Management System, there should be a list of requirements to follow. The requirements include the data that you want the system to process and have. The data could be those details that you want the system to collect or the inputs that you want the system to process. If you want the system to run smoothly, the requirements better be met and if not, you may want to reconsider the project.

Allocate a Budget

Most system development projects will need a budget. It is the amount you are willing to spend for the project. There are those who spend a lot for the development of a Trade Order Management System and there are those who spend only a bit. Some may spend less than they expect but this could be due to the system’s flexibility. Try to allocate a budget that you can afford, to prevent overspending.

Get the Best Quality of Staff

The quality of the people you get to work on the Trade Order Management System is very important. You will want people who are experienced and educated in the field of Trade Order Management System so that they can handle the project well. If you are choosing someone to come up with the Trade Order Management System, make sure they have the knowledge and expertise that you need for the project.

Decide on the Source of Funding

You will have a source of funding where you can get a loan and use it to fund the project. There may be a lending company that can lend you money for the idea. It is wise that you get to work on this first before you start preparing for the project. If you can get the money from a lending company, you will be able to focus on creating the Trade Order Management System.

Choose the Right Company

You may wonder why you have to choose the right company to get the project done and it is very simple. Your Trade Order Management System will be created based on your needs and there is no way you will be able to get the right result from a company with the wrong team and expertise. You will want to get a company that can give you the right idea and service, so choose wisely.

Consider Other Factors

You will want to consider certain factors while you are creating a Trade Order Management System. First, you have to consider who will be using the system. If it is for your business, you will want to know every important detail about the system. If it is for an online business or for personal use, it becomes all the more important to consider the design and user experience.

Trade Order Management System іѕ a ѕеrvісе сrеаtеd tо hеlр ѕеllеrѕ and buyers, whаtеvеr the lеvеl of thеіr еxреrtіѕе. Such a system enables retailers to save a lot of time in processing all the orders they have received.

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