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EDI and online trading

  • 12-11-2010 8:17am
    #1
    Chris M Olive
    Closed Accounts Posts: 1 ✭


    The EDI (Electronic Data Interchange) forms the backbone of communication in all online trading operations. EDI provides a proprietary secure network for the transfer of dates and information between the following entities associated with online trading:
    • Brokers and Stock Exchanges
    • Brokers and Their Associates (Sub-brokers)
    • Depository/National Securities Depository Limited (NSDL) and the Depository Participants
    • Depository/NSDL and the Stock Exchange
    • Depository/NSDL and Issuer Company and/or Their Registrar and Transfer Agents

    But, certain questions remain to be answered. The following are some of the questions for which an investor may like to get an answer. Consequently, an understanding of how EDI works and the security it offers to the investors is essential.

    1. Actually what is an EDI?
    2. Does it provide a secure communication system for the transmission of investor’s financial information?
    3. Is the security adequate and built into the system?
    4. How does it facilitate Internet trading?

    EDI was born in early 1970s to automate the supply change interactions. Buyers are connected to suppliers with exclusive data links that are used to exchange data electronically through a comprehensive set of standardized protocols. It is the first widely known application of business-to-business electronic commerce. The top commodity trading companies and firms with global operations did not mind spending millions of dollars to install and maintain communication lines with the best protocol.


Comments

  • #2
    mono627
    Registered Users, Registered Users 2 Posts: 288 ✭✭mono627


    Chris M Olive wrote: »
    The EDI (Electronic Data Interchange) forms the backbone of communication in all online trading operations. EDI provides a proprietary secure network for the transfer of dates and information between the following entities associated with online trading:
    • Brokers and Stock Exchanges
    • Brokers and Their Associates (Sub-brokers)
    • Depository/National Securities Depository Limited (NSDL) and the Depository Participants
    • Depository/NSDL and the Stock Exchange
    • Depository/NSDL and Issuer Company and/or Their Registrar and Transfer Agents

    But, certain questions remain to be answered. The following are some of the questions for which an investor may like to get an answer. Consequently, an understanding of how EDI works and the security it offers to the investors is essential.

    1. Actually what is an EDI?
    2. Does it provide a secure communication system for the transmission of investor’s financial information?
    3. Is the security adequate and built into the system?
    4. How does it facilitate Internet trading?

    EDI was born in early 1970s to automate the supply change interactions. Buyers are connected to suppliers with exclusive data links that are used to exchange data electronically through a comprehensive set of standardized protocols. It is the first widely known application of business-to-business electronic commerce. The top commodity trading companies and firms with global operations did not mind spending millions of dollars to install and maintain communication lines with the best protocol.

    For me this line answers question 1, 2 and part of 3. If you want to physically know what an EDI is then I suppose you could call it the components used to facilitate the exchange (Fibre optic cables or copper in this country, the exchange server and the users PC along with a user interface). The data is usually encrypted so yes that means it is secure.

    Not really sure what you want to know for question 4 unless you want a step by step explanation of what happens between the moment the trader presses the order until the trader finds out what price he has paid for the product.


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