A trading room is primarily a place where day traders gather together and trade the financial markets. This concept was first introduced in 1971 by Morgan Stanley in the USA after the creation of NASDAQ, where they set up an equity desk and a bond trading desk. This concept spread into European markets between 1982 and 1987 to break the difference between brokers and jobbers. With the introduction of various asset classes and emerging markets, a need was established to have various trader positions inside the trading room.
A trading room is a large area equipped with many desks, computers, and high-speed internet connections facilitating speedy transactions with the exchange.
Large brokerage houses and institutions have their private trading rooms where activities such as market making, wholesale trading, bulk trading take place in great volumes. Jobbing and arbitrage activities are also successfully executed.
A trading room caters to both retail and wholesale activities. Whereas large institutions focus on wholesale activities and bulk deals the smaller organizations and brokerage houses focus on retail trading.
These days physical trading rooms have been changed to an online trading room. Thanks to the technology for making such a nice change. These trading rooms are available for the regular retail traders who come there with a small capital and trade his views with other traders. He is assisted by mentors who have experience in the market and guide him through his trades.
Apart from this, the online trading room generally allows a day trader to share a common platform with other traders. Ideas are shared and collective trades are taken to the benefit of all. Being in the midst of all market activity, a trading room is always updated with the latest news, happenings, and events thereby facilitating prompt action. Constant surveillance from overseers and nominal charges make online trading rooms a very attractive place for traders to come and make money.