DEFINITION of 'Buttonwood Agreement'

The agreement between 24 of United States' first and most prominent brokers. Rumored to have occurred under a "buttonwood" tree, this marked the beginnings of the investment community of Wall Street.

BREAKING DOWN 'Buttonwood Agreement'

The brokers based the U.S. system upon existing European trading systems. In fact, the Spanish practice of dividing the silver dollar into eighths was largely responsible for the prevalence of fractions when describing stock values.

RELATED TERMS
  1. Give Up

    A procedure in securities or commodities trading where the executing ...
  2. Big Board

    A nickname for the New York Stock Exchange (NYSE), located at ...
  3. Decision Tree

    A schematic tree-shaped diagram used to determine a course of ...
  4. Smithsonian Agreement

    An agreement reached by a group of 10 countries (G10) in 1971 ...
  5. Board Broker System

    A system used by commodity exchanges, in which agents are assigned ...
  6. Each Way

    A slang phrase used when a broker earns commissions from both ...
Related Articles
  1. Investing

    Picking Your First Broker

    If you're a rookie investor, your first big investment decision should be an informed one.
  2. Investing

    How To Choose The Right Online Trading Broker

    The online broker market is becoming more competitive, but differences exist in services that can help traders choose the broker that’s right for them.
  3. Investing

    Dollar Tree Posts Disappointing Q2 Earnings (DLTR)

    Discount retailer Dollar Tree (NASDAQ: DLTR) recently posted lackluster second quarter earnings which missed analyst estimates on both the top and bottom lines. During the quarter, revenue rose ...
  4. Trading

    Is Your Forex Broker A Scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  5. Trading

    The Best Low-Cost, Web-Based Trading Brokers

    With this table, investors can differentiate between top low-cost, web-based trading brokers by price, capabilities, and offerings.
  6. Financial Advisor

    Is Your Broker Acting In Your Best Interest?

    Learn the clues you'll need to determine whether you've chosen a reputable professional.
  7. Trading

    Broker Or Trader: Which Career Is Right For You?

    A day in the life of a broker or trader is an exciting and varied one. Find out how to decide between these two financial professions.
  8. Trading

    How Forex Brokers Make Money

    Forex brokers set their prices based on commission, spread, or a combination of both. Traders have to be cautious in the thinly regulated forex market.
RELATED FAQS
  1. Where does the name "Wall Street" come from?

    As with many of the famous streets and roads in the world, Wall Street's origins have historical significance. Its name is ... Read Answer >>
  2. I'm new to this. Can I sell or buy stock by myself?

    In order to buy stocks, you need the assistance of a stock broker since you cannot just phone up a company and ask to buy ... Read Answer >>
  3. Does a broker always have to buy a stock if I want to sell it?

    There are certain times when a broker must purchase the stock that you are selling. For example, if the broker is a market ... Read Answer >>
Trading Center