Trader Workstation
Also written TWS · Trader Workstation (TWS)
The terminal through which a trading member logs in to the exchange's trading system to enter orders and view its own orders, trades and market information.
In plain language
The trader workstation (TWS) is the broker's window into the exchange. It is the terminal from which a member accesses the exchange trading system and enters orders.
Each trader logs in with a Trading Member ID and a User ID, which uniquely identify who is trading or enquiring. Exchanges provide their own trading platforms, and they also allow members to build customised trading workstations that connect to the exchange system.
How it works
What a TWS shows (Chapter 3, section 3.1.1.1)
| Member's own information | Market information |
|---|---|
| Orders entered | Order book |
| Orders modified | Security/contract price information |
| Outstanding orders | Security/contract trade information |
| Order log | Additional information |
| Trade details |
Ways to connect. Exchanges offer CTCL, internet-based trading, DMA, STWT (wireless), algorithmic trading and smart order routing to members, who can connect by leased line, VSAT or co-location.
Controls that live on the TWS (Chapter 4, section 4.1.1.7, Pre-trade Risk Controls)
- Pre-order and pre-trade risk checks are available on the TWS and in the exchange trading system; some are monitored by the member and some by the exchange.
- An order in the normal market with value above Rs 10 crore per order cannot be accepted.
- An alert message appears on the trading terminal when an order is placed in a security under a surveillance measure such as GSM, ASM or ESM.
- Cancel on Logout (COL): if an order is entered with COL, all the user's outstanding orders are cancelled when the user logs out of the TWS.
- Kill switch: listed alongside COL, it lets the member cancel all outstanding orders with a single command.
Who may operate one. A trading member may appoint Authorised Persons to operate trading workstations, with the exchange's specific prior approval for each person, segment by segment (Chapter 2). In the SME segment, a separate trader workstation is provided for the market maker (Chapter 3).
A worked example
Order sizes are illustrative; the Rs 10 crore limit is the workbook's.
A dealer at Kaveri Stock Broking logs in to the TWS with the firm's Trading Member ID and her User ID.
- She enters a buy order for an institutional client: 1,50,000 shares at Rs 700. Order value = 1,50,000 × Rs 700 = Rs 10.50 crore. The pre-order value check rejects it, because a normal-market order above Rs 10 crore cannot be accepted.
- She enters 1,40,000 shares at Rs 700 instead: 1,40,000 × Rs 700 = Rs 9.80 crore. This passes the value check (other checks still apply).
- For another client she places an order in a stock under ASM. The terminal shows a surveillance alert before the order goes through.
- She had flagged her open orders COL. At the end of her shift she logs out, and every outstanding order under her user ID is cancelled automatically.
Why NISM asks about it
Chapter 3 (section 3.1.1.1, Trader Workstation) is the core: the definition, the Trading Member ID/User ID login and the two kinds of information a TWS shows. Chapter 4 (section 4.1.1.7) adds pre-trade checks available on the TWS, the Rs 10 crore per-order value limit, surveillance alerts, Cancel on Logout and the kill switch. Chapter 2 (Authorised Persons operating workstations) and the SME market-maker workstation are side references. Typical questions ask what a TWS displays or what COL does.
Common exam traps
- Two kinds of information: the member's own transaction information and market information. The order book is market information; the order log is the member's own information.
- Login uses Trading Member ID plus User ID.
- COL cancels outstanding orders on logout; a kill switch cancels them all on one command without logging out.
- Rs 10 crore is a per-order value ceiling in the normal market.
- Authorised Persons need exchange approval person by person and segment by segment.
Where this is taught
Free preparation for NISM Series IVRelated terms
- Algorithmic tradingAny order generated by automated execution logic rather than typed in by a person — software that pushes buy and sell orders into the exchange once its parameters are met.
- Co-locationA stock exchange facility, offered to trading members for a fee, to place their computer servers in the same premises as the exchange's servers so their orders reach the exchange faster.
- Direct Market AccessA facility, introduced by SEBI in 2008 for institutional investors, that lets a client send orders straight into the exchange trading system through the broker's infrastructure without manual intervention by the broker.
- Immediate or CancelA time condition on an order: whatever can be matched the moment it reaches the market is executed, and any unmatched balance is cancelled immediately rather than waiting in the order book.
- Kill switchA pre-trade facility that lets a trading member cancel every one of its outstanding orders with a single command — the emergency brake for a malfunctioning terminal or algorithm.
- Order bookThe live electronic list of unmatched buy and sell orders for a contract, arranged by price level, showing quantity and number of orders at each price — generally up to five price levels a side.
- Technical glitchA malfunction in a stock broker's electronic trading or risk systems during market hours that stops, slows or distorts functions like log-in or order placement for five minutes or more.
- Market makerA market participant who continuously quotes both buy and sell prices for a security, providing liquidity so that other traders can deal without waiting for a matching counter order.
- Internet Based TradingAn order-routing facility, approved exchange-by-exchange, letting a broker route client orders to the exchange trading system over the internet instead of only from an exchange-provided terminal.