Hybrid market

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A hybrid market allows a stockbroker to choose to have an order executed immediately in a fully automated electronic exchange or to have it routed to the trading floor, where it is completed manually via the more traditional live auction method, in the presence of a specialist broker. The fully electronic method has the advantage of speed, often completing orders in less than one second, but comparable manual transactions take an average of nine seconds. [1] However, the live auction method differentiates itself with the human interaction and expert judgment of the specialists, which are currently seen as obsolete since most customers seem to prefer speed, and the New York Stock Exchange (NYSE) is working to redefine the role played by the specialists in the market. [2] The NYSE is seen as the world's premier example of a hybrid market.

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<span class="mw-page-title-main">New York Stock Exchange</span> American stock exchange

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An electronic communication network (ECN) is a type of computerized forum or network that facilitates the trading of financial products outside traditional stock exchanges. An ECN is generally an electronic system that widely disseminates orders entered by market makers to third parties and permits the orders to be executed against in whole or in part. The primary products that are traded on ECNs are stocks and currencies. ECNs are generally passive computer-driven networks that internally match limit orders and charge a very small per share transaction fee.

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References

  1. "Hybrid Market on Investopedia" . Retrieved 2008-06-01.
  2. "WSJ: 'NYSE Plans to Revise Specialist-Trader Rules'". Archived from the original on 2010-03-03. Retrieved 2008-06-01.