The,future,stock,exchanges,Nor finance, share, loan The future of stock exchanges


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Normal 0 false false false MicrosoftInternetExplorer4 st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;} As competition is continually growing between the remaining traditional New York Stock Exchange specialist systems against the relatively new, the future of stock trading appears to be electronic, all Electronic Communications Networks, or ECNs. ECNs point to their speedy execution of large block trades, while the role of specialists in maintaining orderly markets is cited by specialist system proponents, especially under extraordinary conditions or for special types of orders. UK based exchanges such as PLUS Markets are increasing competition with traditional exchanges. The ECNs claimed that an array of special interests profit at the expense of investors in even the most mundane exchange-directed trades. They argued that Machine-based systems are much more efficient, because they speed up the execution mechanism and eliminate the need to deal with an intermediary. Historically, the 'market' has been slow to respond to technological inventions, thus allowing growing pure speculation to continue. Conversion to all-electronic trading could eliminate the trading profits of floor specialists and the NYSE's "upstairs traders", who, like in September and October 2008, had billions of dollars profit selling shares they did not have, and days later buying the same amount of shares, but maybe 15 % cheaper, so these shares could be handed to their buyers, thereby making the market fall deeply. William Lupien, founder of the Instinet trading system and the OptiMark system, has coined an interesting statement "I'd definitely say the ECNs are winning... Things happen awfully fast once you reach the tipping point. We're now at the tipping point." Preventing the front running by which manual Wall Street traders use knowledge of a customer's incoming order to place their own orders so as to benefit from the perceived change to market direction that the introduction of a large order will cause is one example of improved efficiency of ECNs is the. ECNs make executing large trades at high speed without manual intervention an illegal practice, and that’s why several NYSE floor brokers were investigated and severely fined in recent years. Under the specialist system, when the market sees a large trade in a name, other buyers are immediately able to look to see how big the trader is in the name, and make inferences about why s/he is selling or buying. All traders who are quick enough are able to use that information to anticipate price movements. Some however, believe the answer will be some combination of the best of technology and "upstairs trading" — in other words, a hybrid model. Trading 25,000 shares of General Electric stock would be a relatively simple e-commerce transaction while trading 100 shares of Berkshire Hathaway Class A stock may never be depending on quote and volume. The choice of system should be clear (but always that of the trader), based on the characteristics of the security to be traded.

The,future,stock,exchanges,Nor

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