POWERING THE EXCHANGING WORLD
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POWERING THE EXCHANGING WORLD. Provided by James Maguire, Training Manager NYSE Euronext. October 5, 2009 New York, New York Overview of the NYSE. NYSE: History. The Buttonwood Agreement 1792. A matter of trust 24 stockbrokers agreed to trade with each other. Continuous Market 1871.

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Powering the exchanging world

  • POWERING THE EXCHANGING WORLD


October 5 2009 new york new york overview of the nyse

Provided by

James Maguire, Training Manager

NYSE Euronext

October 5, 2009New York, New YorkOverview of the NYSE


Nyse history

NYSE:History


The buttonwood agreement 1792

The Buttonwood Agreement 1792

  • A matter of trust

  • 24 stockbrokers agreed to trade with each other


Continuous market 1871

Continuous Market 1871

  • Large open trading floor

  • Simultaneous trading in all securities

  • Trading posts

  • Origin of the specialist


New building 1903

New Building 1903

  • Architectural innovations

  • Trading posts and telephones

  • Annunciator boards

  • Pneumatic tubes


New technologies 1960 1970s

New Technologies 1960-1970s

  • Designated Order Turnaround (DOT)

  • Intermarket Trading System (ITS)


New technologies 1980 1990s

New Technologies 1980-1990s

  • Trading Floor Upgrade

  • SuperDOT

  • Wireless technology


Hybrid market 2005

Hybrid Market 2005

  • More choice for customers

  • Price improvement for auction market orders

  • Speed and certainty for electronic orders


Business of the nyse

Business of the NYSE

  • History of the NYSE

    • Buttonwood Agreement – 1792

    • New York Stock and Exchange Board – 1817

    • Addition of Trading Posts – 1872

    • 1929 Crash gives birth to regulation

    • 1934 Securities Act

    • SIAC established – 1972

    • Electronic Display Book – 1983

    • Circuit Breakers – 1988

    • Trading in Decimals – 2000

    • Direct+ – 2000

    • NYSE OpenBook – 2002

    • NYSE and Arca merge – 2006

    • NYSE and Euronext merge – 2007

    • NYSE and AMEX merge – 2008


The largest exchanges in europe and the us uniting the world s two largest pools of capital

  • Asia

  • Middle East

The Largest Exchanges in Europe and the US, Uniting the World’s Two Largest Pools of Capital

  • NYSE Euronext offers tailored solutions to complement your global financing needs and accommodates multiple asset classes and issuers of any scale.

  • Strategic Relationships

  • Abu Dhabi Securities Market

  • Strategic Alliance

  • Qatar Exchange

  • 20% Equity Stake

  • Tel Aviv Stock Exchange

  • Strategic Alliance

  • Americas: NYSE Group

  • Europe: NYSE Euronext

  • The World’s Largest Equity Market.

  • The Largest Exchange in Europe; the only international integrated exchange in the world.

  • Tokyo Stock Exchange

  • Strategic Alliance

  • National Stock Exchange (India)

  • 5% Equity Stake

  • Multi Commodities Exchange (India)

  • 5% Equity Stake

  • Bursa Malaysia

  • Strategic Alliance

  • Dalian Commodities Exchange

  • Strategic Alliance

  • Philippines Stock Exchange

  • Strategic Alliance

NYSE Liffe

  • Derivatives

NYSE Euronext

  • Cash Equities

  • DRs

  • Fixed Income

  • ETFs

  • Certifications

  • Warrants

NYSE Alternext

  • Cash Equities

  • DRs

NYSE

  • Cash Equities

  • DRs

  • Fixed Income

  • ETFs

NYSE Amex

  • Cash Equities

  • DRs

  • Equity Options

  • ETFs

NYSE Arca

  • Cash Equities

  • DRs

  • ETFs

NYSE Arca Europe

  • Cash Equities

  • DRs

NYSE Liffe US

  • Derivatives

  • Latin America

  • BM&FBovespa

  • Equity Stake

  • Listing Venue

  • Trading Platform


Nyse trading dmms brokers commission independent

NYSETrading DMMsBrokers-Commission-Independent


The changing global equity markets

NYSE Market Model Evolution

Evolution of Specialists to Designated Market Makers (DMMs)

Greater incentive to add liquidity, via quoting at the NBBO

Greater flexibility to commit capital

More opportunities to leverage sophisticated technology

Increased participation through new rebate model

Introduction of Supplemental Liquidity Providers (SLPs)

Complementary to DMMs

Seek to deepen liquidity and enhance price discovery

Economically incented to quote on NYSE

Innovative Solutions to Further Attract Block Liquidity

Launch of NYBX with BIDS Holdings

Launch of NYSE MatchPoint for portfolio crossing

Roll-out of the Universal Trading Platform

Provides seamless high-performance trading across asset classes, global geographies, and time zones

Reduces latency from 62 milliseconds to sub-10 milliseconds

The Changing Global Equity Markets

  • The NYSE Continues to Adapt its Market Model to Address These Changes


Liquidity advantage designated market maker dmm

Role of a DMM:

Manage the auction process and ensure a fair & orderly market

Quote at the National Best Bid or Offer (NBBO) a specified percentage of the time

Facilitate price discovery during market openings & closings

Provide capital to ensure liquidity during temporary imbalances

Serve as an information resource for company management

The NYSE Liquidity Advantage:

The only market where market makers have an obligation to quote at NBBO a specified percentage of the time

The only market where market makers have accountability with performance reviewed by the Exchange

The only market combining the newest in technology with the human element of the Trading Floor

Liquidity Advantage: Designated Market Maker (DMM)

  • DMM Participation Rate

  • in % of NYSE Trades


Floor brokers

Floor Brokers

  • Commission Brokers

  • “House Brokers”

  • Execute orders on behalf of firm’s customers or his/her firm’s own account

  • Independent ($2) Brokers

  • Provide basic services, typically order execution and clearing

    • directly conduct business for public

    • execute special orders for customers

    • assist House Brokers on a busy day


Trading floor and the systems that support trading

Trading Floor and the Systems that Support Trading


Trading floor

Trading Floor

Main Room

Original Trading room opened on April 23, 1903

Posts 5 – 11 (NYSE equities)

Garage

Added as a second Trading room in 1922

Posts 1 & 2 (NYSE Amex equities)

Posts 3 & 4 (NYSE equities)

Blue Room and EBR

NYSE Arca Options

NYSE Amex Options

Tech Support

Executive Ramp


Display book

Display Book

DMM’s order management and execution workstation

Receives and displays orders/interest

Executes and reports transactions and publishes results to the Consolidated Tape

Auto-ex trades

1 million shares

Auto-quote

Manual trades

Connects with other NYSE Systems for:

Comparison, surveillance, and reporting information to customers

Interfaces with other market data system and National Market System


Display book1

Display Book


Broker booth support system bbss

Broker Booth Support System (BBSS)

Broker’s order management system

Displays

unexecuted and closed orders

individual order activity

e-Quote details

Provides messaging capability between the upstairs trading desk and the e-Broker

Routes orders via SuperDOT to the e-Broker or Post (Display Book)

Routes reports to an upstairs trading desk


Powering the exchanging world

BBSS


E broker

e-Broker

Receive and view orders

Send interest to Display Book (Dot and e-Quotes)

Send e-Quote to external algorithm (Broker Algo)

Retrieve market information, including Trades, Quotes, OpenBook, Broker Volume, and VWAP data

Broadcast interest in a particular stock to other Brokers (BlockTalk)

Send market looks (current quote/ crowd interest) to the Trading Assistant and the Trading Desk via email

Enter execution reports

Send reports instantly to the booth and customer


Floor broker tools

Floor Broker Tools

  • Broker Algorithms

  • Order sent from handheld to external Algo engine

    • Pragma & Deep Value

  • Broker specifies specific trading strategy and time parameters

  • Algo generates e-Quotes to Display Book

  • Block Talk

  • Allows Floor Brokers to alert each other of their interest

    • Broker subscribes and broadcasts through the handheld

  • Provides order confidentiality


  • E broker1

    e-Broker


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