What is a Trading Arcade?

Malcolm Tatum
Malcolm Tatum

Trading arcades are local facilities where investors can gather together and conduct trades on their own accounts without the need to visit the trading floor of an exchange or process the trade through a brokerage house. In many cases, a trading arcade is organized and operated by someone who is a member of a proprietary trading group, like a clearing organization. The actual process of the trading is finalized using an electronic communication network that registers the activity and adjusts the customer accounts accordingly.

Man climbing a rope
Man climbing a rope

The local trading arcade makes it possible for traders to visit a nearby facility and conduct their own trades with very little effort. A basic arcade is nothing more than a large room that is equipped with a number of computer workstations that are available for use. Overhead monitors alert the traders to current market activity, allowing them to quickly respond by placing purchases or sales on the spot. There are some arcades that are structured with a pit or gathering area similar to those found at many stock exchanges. The atmosphere in many arcades is somewhat like that of an actual stock market, in that there is a sense of being present in some form on the floor of an exchange, but without the need to actually travel to the physical location of the marketplace.

One of the advantages of a trading arcade is that any trader who prefers to manage his or her own accounts may do so. Typically, there are qualified personnel on hand to help novices understand how to use the computer equipment, as well as how to track movements in the marketplace, project future movements, and place an electronic order to buy or sell. Once the trader is comfortable with the process, it is possible to conduct the trading activity for as long as desired. When finished with the session, the trader simply logs off the system and the workstation is ready for use by another trader.

Another benefit to utilizing the services of a trading arcade is that while the pace is less frenetic than being in the pit at a stock exchange, the opportunity to confer with other investors is still present. This means traders can ask the opinions of other traders before making a decision to buy or sell. The camaraderie that can be experienced in the trading arcade can strengthen ties in the local investing community, something that placing orders through a broker or via an online trading account accessed at home could never manage.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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