Hybrid market
Encyclopedia
A hybrid market allows a stock broker
to either have his 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 under one second while comparable manual transactions take an average of nine seconds. However, the live auction method differentiates itself with the human interaction and expert judgment of the specialists, though they are currently seen as obsolete since most customers seem to prefer speed, and the NYSE is working to redefine the role these specialists play in the market. The NYSE
is seen as the world's premier example of a hybrid market.
Stock broker
A stock broker or stockbroker is a regulated professional broker who buys and sells shares and other securities through market makers or Agency Only Firms on behalf of investors...
to either have his order executed immediately in a fully automated electronic exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
, or to have it routed to the trading floor
Trading room
A trading-room gathers traders operating on financial markets.The trading-room is also often called the front office.The terms dealing-room and trading-floor are also used, the latter being inspired from that of a open outcry stock exchange....
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 under one second while comparable manual transactions take an average of nine seconds. However, the live auction method differentiates itself with the human interaction and expert judgment of the specialists, though they are currently seen as obsolete since most customers seem to prefer speed, and the NYSE is working to redefine the role these specialists play in the market. The NYSE
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
is seen as the world's premier example of a hybrid market.