1 / 10

Chapter 18 – Common Markets

Chapter 18 – Common Markets. Where Stocks Trade First Market – Trading on an Exchange Physical Floor and Membership Examples: NYSE and AMEX Second Market – Trading of non-listed Stocks Via Dealer Markets Third Market – Trading of listed stocks through OTC (over-the-counter)

Télécharger la présentation

Chapter 18 – Common Markets

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Chapter 18 – Common Markets • Where Stocks Trade • First Market – Trading on an Exchange • Physical Floor and Membership • Examples: NYSE and AMEX • Second Market – Trading of non-listed Stocks • Via Dealer Markets • Third Market – Trading of listed stocks through OTC (over-the-counter) • Fourth Market – Direct Trading between buyers and sellers (Institutions)

  2. Chapter 18 – Common Markets • NYSE (New York Stock Exchange) • Founded in 1792 • Membership (Trade between Members Only) • 1,366 Seats • Buy and Sell like any asset • $2 million last transaction, record $2.65 million • 3,000 plus listed stocks • Listing Requirements • Specialist System for Trading • 17 Posts

  3. Chapter 18 – Common Markets • Trading Agents at the NYSE • Commission Brokers (largest group) • Execute customer orders • 500 Members • Floor Brokers • $2 Brokers – handle overflow of commission brokers • Floor Traders • Independent traders for their own accounts • Specialists – One assigned to each stock

  4. Chapter 18 – Common Markets • Trading at the NYSE • Market Order • Immediate execution at the best available price • Routed to Specialist (Post) • Auction Process • Limit Order • Execution only at requested or better price • Awaits execution at the Post in the Limit Order Book • Priority of Limit Order Book

  5. Chapter 18 – Common Markets • OTC – NASD or NASDAQ • Telecommunications Network • Links Market-Makers across the Nation • 4,700 different common shares • Tiers • NNM – NASDAQ National Market • Largest capitalized stocks • 3,800 stocks • Small Capitalization Market, 900 shares • OTHER OTCs – • Bulletin Board – 5,500 securities • Pink Sheets

  6. Chapter 18 – Common Markets • Third Market • Listed on both an Exchange and OTC market • Originally Dealers separate from NYSE • Allowed negotiation of commissions prior to 1975 • Specifically for Institutional Trading • Repeal of Rule 390 • Members of NYSE must trade with other members of NYSE • CQS (Consolidate Quotation System) • Via NASD

  7. Chapter 18 – Common Markets • The Fourth Market – ECNs and Crossing Networks • Electronic Trading Networks • Broker-dealer owned system • Anonymous way to enter trade requests • Postings for buying and selling (like e-Bay) • Subscription prices for trading • Crossing Networks • Batching networks (call market system) • Anonymous trading

  8. Chapter 18 – Common Markets • Mapping of a trade • NYSE • Market Order • Limit Order • NASDAQ • Three screens • Order Execution • Dealer Requirements • Which System is Better? • Specialist Charge to Maintain Orderly Market

  9. Chapter 18 – Common Markets • Trades • Buying on Margin • Broker Firm loans part of the cost to buy • Short Selling • Selling first, buying later • Block Trades • 10,000 shares or $200,000 (upstairs) • Program Trades • Simultaneous trading of different stocks

  10. Chapter 18 – Common Markets • Stock Market Indices • Price-Weighted • Value Weighted • Equally Weighted • Price Efficiency • Weak • Semi-Strong • Strong

More Related