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.

RELATED TERMS
  1. Specialist

    A member of an exchange who acts as the market maker to facilitate ...
  2. Board Broker System

    A system used by commodity exchanges, in which agents are assigned ...
  3. Limit Order Information System ...

    An electronic system used by specialists in the stock market. ...
  4. Specialist Unit

    A group of firms or individuals that act as a market maker for ...
  5. Commodity Market

    A physical or virtual marketplace for buying, selling and trading ...
  6. Equity Market

    The market in which shares are issued and traded, either through ...
Related Articles
  1. Markets

    Blackboard's Great Business Model

    A look at the education technology company's recent acquistion and prospects for the future.
  2. Markets

    The Death Of The Trading Floor

    Electronic trading has almost completely replaced face-to-face human trading.
  3. Retirement

    Electronic Trading Tutorial

    Learn about the systems that run the market. Topics include market makers, specialists, SuperDOT, ECNs, SOES, Level I, II, and III Access, and more.
  4. Investing

    Electronic Trading: Conclusion

    If you are a long-term investor, you can take this tutorial with a grain of salt. At least now you have some insight into how electronic systems give direct access to the market. We hope this ...
  5. Trading

    Take A Tour Of The Futures Trading Pit

    Discover why controlled chaos can mean an exciting investment experience for you.
  6. Markets

    When Will it Be Safe to Buy Commodities?

    When will it be safe to buy commodities (and which ones)? A closer look at the commodities markets and how they move.
  7. Trading

    Commodities: The Portfolio Hedge

    These diverse asset classes can provide downside protection and upside potential. Find out how to use them.
  8. Trading

    Creating Automated Trading Systems Using Interactive Brokers

    Learn how to use this automated global electronic market maker and broker.
  9. Trading

    An Overview Of Commodities Trading

    Commodities markets, both historically and in modern times, have had tremendous economic impact on nations and people. Investing in commodities can quickly degenerate into gambling or speculation ...
  10. Investing

    The Closing Cross: How Nasdaq Stock Prices Are Set

    When you hear that your favorite stock closed at a record high price, have you ever considered how that price was reached? The calculation effort is far more complex than you might expect. To ...
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. 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 >>
  4. How can I invest online in oil, gold and other commodities?

  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 is the history of futures?

    Explore the history of futures trading and the origin of the major commodity futures trading exchanges in England and the ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

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

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

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