Hybrid Market

AAA

DEFINITION of 'Hybrid Market'

A securities exchange that facilitates trading through a blend of an automated electronic trading platform and a traditional floor broker system. Hybrid markets give brokers a choice between participating in the exchange through the traditional floor broker system, or the faster automated electronic exchange system.

INVESTOPEDIA EXPLAINS 'Hybrid Market'

In January 2007, the New York Stock Exchange (NYSE) became the prominent example of a hybrid market. The NYSE, one of the world's oldest major exchanges, operated for years with its system of human brokers manually making trades on the trading floor.

However, as of January 24, 2007, the NYSE moved to allow almost all of its listed stocks to become available for electronic trading. These stocks can still be traded in the traditional method on the trading floor, but brokers also have the option of trading them electronically.

The key advantage to electronic trades is speed - they take less than one second to execute, while the average floor broker trade typically takes about nine seconds.

RELATED TERMS
  1. Electronic Communication Network ...

    An electronic system that attempts to eliminate the role of a ...
  2. Floor Broker (FB)

    An independent member of an exchange who is authorized to execute ...
  3. Nasdaq

    A global electronic marketplace for buying and selling securities, ...
  4. Open Outcry

    A vanishing method of communicating on a stock, commodity or ...
  5. Exchange

    A marketplace in which securities, commodities, derivatives and ...
  6. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
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 Full Answer >>
  2. How does the risk of investing in the electronics sector compare to the broader market?

    The risk of investing in the electronics sector closely approximates the risk of investing in the broader market. The electronics ... Read Full Answer >>
  3. How do markets account for systematic risk?

    Systematic risks provide markets with an unpleasant quandary. Economists, policy makers, directors, fund managers and investors ... Read Full Answer >>
  4. What stage of the economic cycle is usually the best for an investor to enter the ...

    The best time during the economic cycle for an investor to enter the electronics sector is when he has confidently identified ... Read Full Answer >>
  5. How do S&P 500 futures work?

    S&P 500 futures are a type of capital asset contract that provides a buyer the right to a predetermined selection of ... Read Full Answer >>
  6. Can I use the current yield to compare a bond to an equity investment?

    Investors should be careful when comparing the current yield on a debt security with the growth of an equity security. Yield ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  2. Options & Futures

    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.
  3. Trading Systems & Software

    The Global Electronic Stock Market

    The way trading is conducted is changing rapidly as exchanges turn toward automation.
  4. 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.
  5. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  6. Investing Basics

    What is the Coupon?

    In the financial world, “coupon” represents the interest rate on a bond.
  7. Investing Basics

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.
  8. Investing Basics

    What is Cyclical Stock?

    A cyclical stock is an equity security whose price is affected by ups and downs in the overall economy.
  9. Investing Basics

    What are Ordinary Shares?

    Ordinary shares are any type of shares that are not preferred and don’t pay any type of predetermined dividend amount.
  10. Investing Basics

    Explaining the Spot Rate

    The spot rate is the immediate purchase price posted on exchanges for purchasing commodities, currency and securities.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center