Nasdaq vs. AMEX. NYSE bought AMEX in 2008. AMEX (American Stock Exchange) was formerly the New York Curb Exchange, a reference to the days when auctions of securities were held on Manhattan streets by curbstone brokers before moving indoors to perrmanent quarters. AMEX trading is now done in the NYSE building at 11 Wall Street in Manhattan.
Like the NYSE, the AMEX is an auction system overseen by specialists in the tickers under their purview who match customer buy orders with customer sell orders and will buy or sell from their own accounts if there are serious order imbalances. Apparently, AMEX specialists are not permitted to naked short a stock.
In Nasdaq and OTC, MMs buy the stock and sell the stock and are allowed to naked short a stock to provide "liquidity" (ahem).
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"The American Stock Exchange is an auction market where prices for a diverse array of products--stocks, options, exchange traded funds (ETFs) and structured products--are determined by public bids to buy and offers to sell. By centralizing order flow on the trading floor, giving public orders priority, and executing orders by price and time sequence regardless of size or source, investors trade on a level playing field and are ensured the best available price.
This sophisticated market structure supports the three primary goals of the Amex:
Trading must be:
Liquid -- Under normal circumstances, investors should be able to buy and sell reasonable volumes of securities (the market should have depth) at prices at or near previous trades (the market should have continuity). Also, under normal circumstances, there should be enough liquidity to reduce volatility, resulting in an orderly market.
Efficient -- Trading on the Exchange should be transacted at the lowest possible cost to the investor. Because buyers and sellers at the Amex can trade directly with each other, spreads are narrowed, resulting in a lower total execution cost for small and large investors.
Fair -- At the Amex, the interests of investors come first--they should always get the best price available. As a result, the market is structured to provide transparency, which means all buying and selling in a security is conducted at one location, in the open, so that all buyers and sellers have an equal opportunity to receive the best price.
Trading in every Amex security is overseen by a specialist stationed on the trading floor. Amex specialists are experienced market professionals from leading firms in the financial industry. As members of the American Stock Exchange, specialists perform a variety of functions and must meet specific obligations in order to fulfill their primary responsibility of maintaining a fair and orderly market in their securities.
Specialists serve as facilitators, employing their extensive knowledge of the market in a security to bring together buyers and sellers, and helping them trade directly with each other. This skill is particularly important when large blocks of securities are brought to the floor.
Specialists act as auctioneers, ensuring that the interests of both buyers and sellers are represented, and that trading proceeds smoothly and efficiently.
Specialists serve as dealers when there is insufficient public interest to accommodate buyers or sellers at prices close to the last trade. In these instances, specialists buy or sell from their own account to improve price continuity and liquidity. They also participate as dealers on all odd-lot orders.
Specialists act as agents or brokers' brokers, holding limit orders entrusted to them by brokers on behalf of customers. These away-from-the-market orders constitute the "book" and specialists are responsible for seeing that they are executed when the market reaches the specified limit price.
Specialists are obligated to maintain a fair quotation spread and to stabilize prices for their securities, as well as seek price improvement on all orders entrusted to them.
Amex specialists are carefully regulated to ensure that their activities are limited to these roles so that they remain unbiased and willing to buy or sell whenever necessary to enhance liquidity or manage price swings.
Registered traders, or market makers, are American Stock Exchange members who provide an additional source of liquidity for securities traded on the Amex. As part of the crowd, they trade for their own account and enhance the specialists' role of providing price continuity and liquidity on both sides of the market.
Floor brokers--both commission and independent brokers--are members of the Exchange who participate in the trading crowd to get the best price for their customers. Members can send orders to floor brokers--either their firms' commission brokers or independent brokers--for execution on the trading floor."
Like the NYSE, the AMEX is an auction system overseen by specialists in the tickers under their purview who match customer buy orders with customer sell orders and will buy or sell from their own accounts if there are serious order imbalances. Apparently, AMEX specialists are not permitted to naked short a stock.
In Nasdaq and OTC, MMs buy the stock and sell the stock and are allowed to naked short a stock to provide "liquidity" (ahem).
##
"The American Stock Exchange is an auction market where prices for a diverse array of products--stocks, options, exchange traded funds (ETFs) and structured products--are determined by public bids to buy and offers to sell. By centralizing order flow on the trading floor, giving public orders priority, and executing orders by price and time sequence regardless of size or source, investors trade on a level playing field and are ensured the best available price.
This sophisticated market structure supports the three primary goals of the Amex:
Trading must be:
Liquid -- Under normal circumstances, investors should be able to buy and sell reasonable volumes of securities (the market should have depth) at prices at or near previous trades (the market should have continuity). Also, under normal circumstances, there should be enough liquidity to reduce volatility, resulting in an orderly market.
Efficient -- Trading on the Exchange should be transacted at the lowest possible cost to the investor. Because buyers and sellers at the Amex can trade directly with each other, spreads are narrowed, resulting in a lower total execution cost for small and large investors.
Fair -- At the Amex, the interests of investors come first--they should always get the best price available. As a result, the market is structured to provide transparency, which means all buying and selling in a security is conducted at one location, in the open, so that all buyers and sellers have an equal opportunity to receive the best price.
Trading in every Amex security is overseen by a specialist stationed on the trading floor. Amex specialists are experienced market professionals from leading firms in the financial industry. As members of the American Stock Exchange, specialists perform a variety of functions and must meet specific obligations in order to fulfill their primary responsibility of maintaining a fair and orderly market in their securities.
Specialists serve as facilitators, employing their extensive knowledge of the market in a security to bring together buyers and sellers, and helping them trade directly with each other. This skill is particularly important when large blocks of securities are brought to the floor.
Specialists act as auctioneers, ensuring that the interests of both buyers and sellers are represented, and that trading proceeds smoothly and efficiently.
Specialists serve as dealers when there is insufficient public interest to accommodate buyers or sellers at prices close to the last trade. In these instances, specialists buy or sell from their own account to improve price continuity and liquidity. They also participate as dealers on all odd-lot orders.
Specialists act as agents or brokers' brokers, holding limit orders entrusted to them by brokers on behalf of customers. These away-from-the-market orders constitute the "book" and specialists are responsible for seeing that they are executed when the market reaches the specified limit price.
Specialists are obligated to maintain a fair quotation spread and to stabilize prices for their securities, as well as seek price improvement on all orders entrusted to them.
Amex specialists are carefully regulated to ensure that their activities are limited to these roles so that they remain unbiased and willing to buy or sell whenever necessary to enhance liquidity or manage price swings.
Registered traders, or market makers, are American Stock Exchange members who provide an additional source of liquidity for securities traded on the Amex. As part of the crowd, they trade for their own account and enhance the specialists' role of providing price continuity and liquidity on both sides of the market.
Floor brokers--both commission and independent brokers--are members of the Exchange who participate in the trading crowd to get the best price for their customers. Members can send orders to floor brokers--either their firms' commission brokers or independent brokers--for execution on the trading floor."
