Wire House


DEFINITION of 'Wire House'

An archaic term used to describe a broker-dealer. Modern-day wire houses can range from small regional brokerages to giant institutions with offices around the world. The term "wire house" owes its origins to the fact that prior to the advent of modern wireless communications, brokerage firms were connected to their branches primarily through telephone and telegraph wires. This enabled branches to have access to the same market information as the head office, thus allowing their brokers to provide stock quotes and market news to their clients.


The global financial crisis of 2008 led to unprecedented turmoil among wire houses, primarily because of the very substantial exposure that many of them had to mortgage-backed securities. While a number of the smaller players were forced to shut shop, some of the most prominent names in the industry (such as Merrill Lynch and Bear Stearns) were either acquired by bigger banks or disappeared altogether into bankruptcy (Lehman Brothers).

Most present-day wire houses are full-service brokerages that provide the complete range of services to clients, from investment banking and research, to trading and wealth management. Although the proliferation of discount brokerages and online quotes has eroded the edge in market information that the wire houses formerly possessed, their diversified activities in capital markets continues to make them very profitable entities.

  1. Broker-Dealer

    A person or firm in the business of buying and selling securities, ...
  2. Wire House Broker

    A non-independent broker working for a wire house firm, or a ...
  3. Bank

    A financial institution licensed as a receiver of deposits. There ...
  4. Liquidity

    The degree to which an asset or security can be quickly bought ...
  5. Operating Cost

    Expenses associated with the maintenance and administration of ...
  6. Substitute

    A product or service that a consumer sees as comparable. If prices ...
Related Articles
  1. Professionals

    Seeking a Financial Advisor Job? Read This First

    The choice between a larger or smaller company may be decided by an advisor's experience or temperament. Find out the best size for you.
  2. Options & Futures

    Direct Access Trading Systems

    DATs can dramatically speed up order execution - find out how this system gives novice traders an edge.
  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

    Should You Get A Six Sigma Black Belt? Average Salary: 98K

    Interested in the Six Sigma Black Belt but unsure whether you need one? Here's a guide to it and how it differs from other belts.
  6. Investing Basics

    What is Equity?

    Think of equity as ownership in any asset after all debts stemming from that asset are paid.
  7. Economics

    What's a Horizontal Merger?

    A horizontal merger occurs when companies within the same industry merge.
  8. Economics

    Explaining Quality Control

    Businesses use quality control to ensure their products and services meet a certain standard, as well as any industry regulations.
  9. Professionals

    What is Backward Integration?

    What is backward integration, and how can it affect industries?
  10. Economics

    How a Monopoly Works

    In economics, a monopoly occurs when one company is the sole (or nearly sole) provider of a good or service within an industry. This potentially allows that company to become powerful enough ...
  1. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  2. Does working capital include inventory?

    A company's working capital includes inventory, and increases in inventory make working capital increase. Working capital ... Read Full Answer >>
  3. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  4. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  5. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>
  6. What is the difference between perfect and imperfect competition?

    Perfect competition is a microeconomics concept that describes a market structure controlled entirely by market forces. In ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
Trading Center