Seat

DEFINITION of 'Seat'

Membership to the NYSE. Owning a seat on the NYSE enables one to trade on the floor of the exchange, either as an agent for someone else (floor broker), or for one's own personal account (floor trader). In the industry, owning a seat on the exchange is a prestigious position, with only a select few able to claim the position.

BREAKING DOWN 'Seat'

The phrase "owning a seat on the exchange" originates in a time before 1871, until which the exchange operated in a "call-market" fashion, which means stocks were traded individually. With this type of trading, each member would sit in an assigned seat and participate in the buying and selling of desired stocks, as they were called for trading.

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RELATED FAQS
  1. What is an ABC Agreement?

    Brokerage and other financial organizations usually purchase seats or memberships at the New York Stock Exchange (NYSE) for ... Read Answer >>
  2. Why are traders on the floor of the exchange?

    Before the advent of electronic trading platforms, the floor of the stock exchange was the location for market transactions ... Read Answer >>
  3. 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 >>
  4. How do I invest in the Nasdaq or the NYSE? Is it even possible? Would I want to? ...

    The Nasdaq and the NYSE are stock exchanges that trade securities. Nasdaq stands for National Association of Securities Dealers ... Read Answer >>
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