Auction exchanges require floor specialists and stockbrokers to facilitate trades between buyers and sellers, with bid and sale prices determining the stock price. E-commerce platforms threaten the viability of auction-style trading, but it remains part of major US exchanges.
Stocks that are bought and sold in financial markets must be traded on an exchange, which is a platform for different types of trading. On an auction exchange, multiple bids representing both buyers and sellers are made on behalf of an individual stock. Trading activity is often continuous during the course of a trading session, with the most competitive offers prevailing. The future of auction exchanges continues to evolve as some of the oldest and most traditional trading facilities around the world adopt e-commerce platforms.
Floor specialists and stockbrokers are needed on an auction exchange to facilitate trades on behalf of buyers and sellers. The process is competitive, especially for securities where demand is high. Offers are submitted by both sellers and buyers of a share, and it is the specialist’s task to obtain the best possible price for clients. Several different factors are at play.
A bid price, for example, represents the price that buyers on an auction exchange are willing to pay for a particular stock. The sale price is the expectation that sellers have based on the most recent trading activity around that financial security. The market specialist’s job is to match buyers of a stock with sellers. When there are more sellers than buyers, the stock price is pushed down. More buyer activity leads to a higher stock price.
The open protest is a system used in trading, and is another way of describing an auction trade. The proliferation of e-commerce platforms and after-hours trading has threatened the viability of auction-style trading. However, open protest is still part of major US exchanges such as the New York Stock Exchange and the CME Group in Chicago, Illinois, where the products are traded, even though there is also an electronic platform on both facilities. The electronic component eliminates the need for trade specialists to match buy and sell orders, as these functions are carried out quickly and efficiently with computers.
In an open protest environment, trade specialists wear colorful jackets to be quickly recognized by colleagues across the trading floor. These professionals use hand signals to communicate orders and often shout out the details surrounding the buy and sell orders that have been placed. In this environment, there are many different transactions being traded on the auction exchange at the same time.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
