DEFINITION of 'Blackboard Trading'

The buying and selling of commodities and futures contracts off of a blackboard found on the wall of a commodity exchange. Blackboard trading specialists hand wrote bids and offers on large chalkboards and when a matching price came up, the trade was executed.


Also called "posting," blackboard trading was too slow of a process to keep up with the volume of trades and began to be replaced by automated quote boards in 1969.

BREAKING DOWN 'Blackboard Trading'

The American Stock Exchange tested the first automated quote boards, which could electronically display the current quotes and the most recent prices of more than 100 securities.

Today, software programs make it possible to execute trades automatically without a dealer, specialist or market maker's assistance, through electronic communications networks and electronic stock exchanges. These systems are programmed to match buy and sell orders for the same number of shares at the same price.

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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. 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 >>
  3. How do financial advisors execute trades?

    Understand how financial advisors normally execute an investor's trades. Learn about the different type of markets and exchanges ... Read Answer >>
  4. 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 >>
  5. 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 >>
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