Global Online Trading System (GoTrade)

Our project addresses the following problem: no platform exists allowing investors the ability to trade on international markets from a single location. The twelve leading online investment programs (by trade volume) provide access to U.S. security exchanges only. A second, related problem is the lack of a fully automated investment portal availing itself of new technologies. Many of these technologies are utilized by leading security exchanges. The electronic communications network (ECN) provides a widely used example of important new technology. ECN's allow both institutional and individual investors a network with automatic matching of buy and sell orders, excising any third party. Currently, NASDAQ ECNs handle more than 40% of trade volume, a number expected to increase. These streamlined trades show evidence of reduced fees resulting from lowered transaction costs. Also with ECN's, we see initial signs of increased individual order matching speed. This evidence demonstrates the good chances for developing a global, fully automated trading system. The GoTrade team objective is to develop the initial design, simulate, and conduct analysis of an online trading system that provides global market access to any potential investor with an internet connection. The team plans to design a system that is secure, fully automated, and situated to optimize connectivity to global markets based upon expected user population distributions and current global internet infrastructure. To keep the project manageable, we limit our research to the NASDAQ, London, and Hong Kong Exchanges. We plan to build a model of our system in Arena and test the performance versus cost of various design alternatives. The factors most important to our system are performance and cost. This determination was made after survey elicitation, interviews with online investors, and consultations with our sponsor and technical advisors. The trade-off analysis associated with these measures will aid in determining the final system configuration.