The term of Straight-through processing (STP) is one of the terms you should know if you are interested to online trading system. It is because through STP is enabling all traders to conduct the entire trade process electronically. In other words, there is no need for manual intervention anymore because through electronic system provided by STP, all processes carried out in capital market and payment transactions are able to be carried out. Furthermore, this concept is already adapted by others financial planning sector like oil and gas and many more.
Logically, it is almost impossible for all trading process to be taken through manual system, especially today when marketplace is one of the messy places with so many types and various trades to handle at the same time that are coming from diversity economic sectors and various goods to be traded. You must have been familiar with the general trading process from the transaction process up to the settlement. Through Straight-through processing (STP) system enables all traders to carry out the trading process up to the settlement in shorter period of time and through STP, the entire trade cycle can be conducted in faster way and in much more efficient way. Furthermore, through STP all transaction processes are able to be computerized and electronically processed in order to save more time and provide efficient trading solutions so fits with the need of global market.
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The idea of straight-through processing (STP) is initially established to fulfill the need of solution for some financial markets firms in order to execute one day trade settlement. Normally, through manual system, all the trading process up to the settlement process needs about three days and it is just not an effective solution for the high demands that are available everyday. In other words, by settling the trade as soon as the trade is made could provide efficient solution for both buyer and seller to execute the transaction efficiently and effectively. Furthermore, by saving more time and energy, straight-through processing (STP) is enabling both buyer and seller to save more operational costs.
You must have know that there are a lot of parties that are involved in the trading process from brokers, banks, traders, investors, asset managers, financial institutions, individuals and so on. The straight-through processing or straight-through processing (STP) system is enabling those parties to carry out the trading process under one roof and as mentioned above, each party could enjoy all the benefits the STP offers as mentioned above from shorter period of time required to the settlement process and also the lower operating costs. Advanced used of STP system is adopted by one single firms to improve their current internal performance. In other words, through internal STP system enables all people involved in the group of firm to cooperate effectively and efficiently through electronic system offered by straight-through processing (STP). This cooperating system is able to improve the quality of transaction between themselves because they could work together in more efficient and effective way.