what is an order management system oms 
an order management system oms is an electronic system developed to execute securities orders in an efficient and cost effective manner brokers and dealers use an oms when filling orders for various types of securities and can track the progress of each order throughout the system an oms in the financial markets may also be referred to as a trade order management system businesses ecommerce businesses and sellers in particular also use an oms to streamline and automate the sales and fulfillment process from the point of sale to delivery to the customer understanding an order management system oms an oms is a software system that facilitates and manages the execution of trade orders in the financial markets an order must be placed in a trading system to execute a buy or sell order for a security a trading order typically contains the following information an oms executes trades through a software system using the financial information exchange fix protocol fix is an electronic communications protocol used to share international real time exchange information related to the trillions of dollars of securities transactions and markets however communicating transactions can also be done through the use of a custom application programming interface api the fix protocol links hedge funds and investment firms to hundreds of counterparties around the world using the oms special considerationsamong institutional trading desks an oms can be used on both the buy side and the sell side to allow firms to manage the life cycle of their trades and automate and streamline investments across their portfolios for review the buy side is a segment of wall street made up of investing institutions such as mutual funds pension funds and insurance firms that tend to buy large portions of securities for money management purposes the buy side is the opposite of the sell side the sell side involves the creation and selling of securities and the firms that facilitate it this would include corporations selling stock to raise capital investment banks who facilitate that process advisors and broker dealers who sell securities together the buy side and the sell side make up both sides of wall street securities trading omsthere are many products and securities that can be traded or monitored with an oms some of the financial instruments traded by using an oms include typically only exchange members can connect directly to an exchange which means that a sell side oms usually has exchange connectivity whereas a buy side oms is concerned with connecting to sell side firms when an order is executed on the sell side the sell side oms must then update its state and send an execution report to the order s originating firm a trading oms will often route orders to the best exchange in terms of price and execution or will allow a trader to manually route which exchange to send the order to an oms should also allow firms to access information on orders entered into the system including details on all open orders and previously completed orders the oms supports portfolio management by translating intended asset allocation actions into marketable orders for the buy side benefits of a trading omsmany omss offer real time trading solutions which allow users to monitor market prices and execute orders in multiple exchanges across all markets instantaneously by real time price streaming some of the benefits that firms can achieve from an oms include managing orders and asset allocation of portfolios an effective oms is critical in helping with regulatory compliance including real time checks of trades both before and after entry omss help compliance officers with tracking the life cycle of trades to determine if there s any illicit activity or financial fraud as well as any regulatory breaches by an employee of the firm an oms can improve workflow and communication among portfolio managers traders and compliance officers omss are an important development in the financial services industry because of the real time monitoring of positions the ability to prevent regulatory violations the speed and accuracy of trade execution and the significant cost savings that result business omsin addition to trading oms there are several other contexts for order management businesses can use oms to keep track of customer orders from point of sale to delivery and to take care of returns and refunds this is especially useful for businesses that have a high volume of sales or rely on shipping via ecommerce for people who have online stores or conduct ecommerce on sites like amazon or ebay having an oms in place can aid greatly in reducing errors saving time and increasing profitability there are several turnkey oms platforms that easily integrate with these and other online marketplaces therefore choosing an oms will depend on the type size and scope of the business involved costlier systems will also have more features and abilities such as taking order payments in a variety of currencies routing suppliers and warehouses based on location or proximity tracking customer order status and forecasting inventory status to anticipate possible shortages of supply invoicing and returns exchanges 