Life after the Big Board Goes Electronic

Abstract

The NYSE's Hybrid Market will be a floor-based facility (a slow market) combined with an electronic platform (a fast market). Technological advances, regulatory pressure, and competition have forced the exchange to introduce an electronic platform, but its success will not be known for some time. This article addresses some of the broad issues involved. The Big Board is considered as a network that provides price and quantity discovery. The article raises several questions about the integration of fast- and slow-market components and presents evidence that in one European electronic exchange, roughly half the euro value of trades does not go through the electronic order book.

Keywords: Financial Markets, Market Structure and Organizations, Investment Industry, Future Directions and Sources of Change