Affirmative Obligation

DEFINITION of 'Affirmative Obligation'

An obligation of NYSE specialists to enter the market on a particular security (either by posting or bidding and ask) when there is not sufficient market demand and supply to efficiently match orders.

BREAKING DOWN 'Affirmative Obligation'

The affirmative obligation requires specialists to create a market for a security when public demand or supply is ineffective and can not create it for itself.

RELATED TERMS
  1. Negative Obligation

    An obligation of NYSE specialists to remain on the sidelines ...
  2. Specialist

    A member of an exchange who acts as the market maker to facilitate ...
  3. Specialist Short Sale Ratio

    A ratio used to determine the sentiment of specialists on the ...
  4. Stopped Order

    A market order on the NYSE that is stopped from being executed ...
  5. Specialist Unit

    A group of firms or individuals that act as a market maker for ...
  6. Write Out

    A dual trade transaction enacted by a specialist in an individual ...
Related Articles
  1. Managing Wealth

    E-Marketing Specialist: Career Path & Qualifications

    Learn more about the duties and responsibilities performed by eMarketing specialists and common career paths this profession takes.
  2. Investing

    The Basics Of The Bid-Ask Spread

    The bid-ask spread is essentially a negotiation in progress. To be successful, traders must be willing to take a stand and walk away in the bid-ask process through limit orders.
  3. Investing

    Negotiating the Bid

    A bid is an offer investors make to buy a security.
  4. Markets

    Economics Basics: Supply and Demand

    Investopedia explains: The Law of Demand, The Law of Supply, Supply and Demand Relationship, Equilibrium, Disequilibrium, and Shifts vs. Movement
  5. Investing

    The NYSE And Nasdaq: How They Work

    Learn some of the important differences in the way these exchanges operate and the securities that trade on them.
  6. Financial Advisor

    eMarketing Specialist: Job Description & Average Salary

    Understand the scope of work of an e-marketing specialist, and learn about the career's required education, skills and average earnings.
  7. Markets

    What is Supply & Demand?

    The law of supply and demand is one of the most basic principles in economics. In simplest terms, the law of supply and demand states that when an item is scarce, but many people want it, the ...
  8. Personal Finance

    What Affirmative Action Means for Businesses

    A look at what Affirmative Action means for your business.
  9. Trading

    What's The Difference Between Options And Futures?

    An option gives the buyer the right, but not the obligation, to buy or sell a certain asset at a set price during the life of the contract. A futures contract gives the buyer the obligation to ...
  10. Markets

    How Bid Price Affects Liquidity

    The bid price is the amount a buyer will pay for a security.
RELATED FAQS
  1. What's the difference between a Nasdaq market maker and a NYSE specialist?

    What's the main difference between a specialist and a market maker? Not much. Both the New York Stock Exchange (NYSE) specialist ... Read Answer >>
  2. Who employs the specialists at New York Stock Exchange (NYSE)? Do they work for themselves, ...

    Before we address this question, let's review what specialists do. Specialists are people on the trading floor of an exchange, ... Read Answer >>
  3. A _______ is a person on the trading floor of certain exchanges who holds an inventory ...

    The correct answer is d. A good example of an exchange using the specialist system is the NYSE. Each stock listed on the ... Read Answer >>
  4. When a floor broker asks a specialist, “How’s PDQ?” ...

    The correct answer is d) When the specialist gave the floor broker the quote of “59.20 to 35; 6 by 11,”  the quote meant ... Read Answer >>
  5. When a floor broker asks a specialist, “How’s PDQ?” ...

    The correct answer is d. When the specialist gave the floor broker the quote of “59.20 to 35; 6 by 11,” the quote meant that ... Read Answer >>
  6. What exactly is being done when shares are bought and sold?

    Most stocks are traded on physical or virtual exchanges. The New York Stock Exchange (NYSE), for example, is a physical exchange ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center