The Paris Bourse, now part of Euronext, is an order-driven, electronic stock exchange. It was automated in the late 1980s. Prior to the 1980s, it consisted of an open outcry exchange. Stockbrokers met on the trading floor or the Palais Brongniart. In 1986, the CATS trading technique was introduced, & the order matching method was fully automated.
The NASDAQ is a virtual listed exchange, where all of the trading is done over a computer network. The method is similar to the New York Stock Exchange. However, buyers & sellers are electronically matched. Two or more NASDAQ market makers will always provide a bid & ask price at which they will always purchase or sell ‘their’ stock.
From time to time, active trading ( in large blocks of securities) have moved away from the ‘active’ exchanges. Securities firms, led by UBS AG, Goldman Sachs Group Inc. & Credit Suisse Group, already steer 12 percent of U.S. security trades away from the exchanges to their internal systems. That share probably will increase to 18 percent by 2010 as more investment banks bypass the NYSE & NASDAQ & pair buyers & sellers of securities themselves, according to information compiled by Boston-based Aite Group LLC, a brokerage-industry consultant.[5]
type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically by traders.
Actual trades are based on an auction market model where a potential buyer bids a specific price for a stock & a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any ask price or bid price for the stock, respectively.) When the bid & ask prices match, a sale takes place, on a first-come-first-served basis if there’s multiple bidders or askers at a given price.
New York Stock Exchange.The New York Stock Exchange is a physical exchange, also called a listed exchange — only stocks listed with the exchange may be traded. Orders enter by way of exchange members & flow down to a floor broker, who goes to the floor trading post specialist for that stock to trade the order. The specialist’s job is to match buy & sell orders using open outcry. If a spread exists, no trade immediately takes place–in this case the specialist should use his/her own resources (money or stock) to close the difference after his/her judged time. Two times a trade has been made the details are reported on the “tape” & sent back to the brokerage firm, which then notifies the investor who placed the order. Although there is a significant amount of human contact in this method, computers play an important role, for so-called
The purpose of a stock exchange is to facilitate the exchange of securities between buyers & sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery.
Trading
