Hybrid Market

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.



comments powered by Disqus
Hot Definitions
  1. Family Limited Partnership - FLP

    A type of partnership designed to centralize family business or investment accounts. FLPs pool together a family's assets into one single family-owned business partnership that family members own shares of. FLPs are frequently used as an estate tax minimization strategy, as shares in the FLP can be transferred between generations, at lower taxation rates than would be applied to the partnership's holdings.
  2. Yield Burning

    The illegal practice of underwriters marking up the prices on bonds for the purpose of reducing the yield on the bond. This practice, referred to as "burning the yield," is done after the bond is placed in escrow for an investor who is awaiting repayment.
  3. Marginal Analysis

    An examination of the additional benefits of an activity compared to the additional costs of that activity. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions. Marginal analysis is also widely used in microeconomics when analyzing how a complex system is affected by marginal manipulation of its comprising variables.
  4. Treasury Inflation Protected Securities - TIPS

    A treasury security that is indexed to inflation in order to protect investors from the negative effects of inflation. TIPS are considered an extremely low-risk investment since they are backed by the U.S. government and since their par value rises with inflation, as measured by the Consumer Price Index, while their interest rate remains fixed.
  5. Gilt-Edged Switching

    The selling and repurchasing of certain high-grade stocks or bonds to capture profits. Gilt-edged switching involves gilt-edged security, which can be high-grade stock or bond issued by a financially stable company such as the Blue Chip companies or by certain governments.
  6. Master Limited Partnership - MLP

    A type of limited partnership that is publicly traded. There are two types of partners in this type of partnership: The limited partner is the person or group that provides the capital to the MLP and receives periodic income distributions from the MLP's cash flow, whereas the general partner is the party responsible for managing the MLP's affairs and receives compensation that is linked to the performance of the venture.
Trading Center