NYSE

1
NYSE

• brokers buy a seat on the exchange for between
  2-2.65 million each year
• - accounts for 85-90 of trading on US exchanges
  (1.425 million trades/day)
• - only 70 of the trades in stocks listed on the
  NYSE are actually executed on the NYSE
• - requires that firms must be of interest enough
  to generate high volumes of trading

2
NYSE

• Brokers
• - the agent representing customer orders to buy
  and sell
• Two types of floor brokers
• - commission brokers are employed by a major
  brokerage house
• - independent floor brokers work for themselves
  and often work for brokerage houses who do not
  have a full-time broker on the floor

3
NYSE

• Specialist
• - critical to the auction process
• - market maker
• - executes trades at a designated trading post
  
• - acts as an auctioneer by quoting fair bid and
  asked prices
• - acts as a catalyst matching buyers and
  sellers
• - stabilize prices by ensuring that prices move
  smoothly with minimal fluctuation

4
NYSE

• How a trade is executed
• 1) investor contacts the broker to sell/buy
• 2) floor broker goes to specialists trading
  post where many other brokers are also trying to
  participate in a trade
• 3) the specialist helps to match up a buyer and
  a seller by matching the highest bid with the
  lowest offer
• 4) when this match is made the trade is
  executed
• 5) the specialist assistant then enters the
  trade into the point-of-sale workstation

5
NYSE
CLICK TO GO BACK TO MINUTES SECTION