In simple terms, STP is the replacement of manual processes with an unbroken electronic stream of information that travels from the broker/dealer systems to the clearinghouse. STP uses messaging standards, translation middleware and networks that link investment managers, broker/dealers, custodian banks and clearinghouses.

In 2005, the New York Stock Exchange (NYSE) moved into the electronic exchange marketplace by ,a pioneer electronic trader. The by purchasing Instinet Group, the other leading U.S. electronic trading company at the time.

Fears that automated trading could cause problems have been fulfilled at times, such as last October when a so-called "flash crash" saw the Dow plunge by almost 1,000 points in a half hour, wreaking havoc on the financial markets.

An investigation by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) determined that caused the "flash crash." An SEC report said automated trade execution system had flooded the Chicago Mercantile Exchange's Globex electronic trading platform with a large sell order causing a panic among investors.