Blackboard Trading


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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