Wire House

AAA

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.

INVESTOPEDIA EXPLAINS 'Wire House'

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.
 

RELATED TERMS
  1. Bank

    A financial institution licensed as a receiver of deposits. There ...
  2. Broker-Dealer

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

    A non-independent broker working for a wire house firm, or a ...
  4. Occupational Safety And Health ...

    Law passed in 1970 to encourage safer workplace conditions in ...
  5. Administrative Order On Consent ...

    An agreement between an individual or business and a regulatory ...
  6. Service Mark

    A brand name or logo that identifies the provider of a service. ...
Related Articles
  1. Professionals

    Evaluating Firm Size In A Financial Advisor Job Hunt

    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. Mergers are not the same as acquisitions.
    Investing

    What's a Merger?

    Mergers are not the same as acquisitions. In an acquisition, one company buys and subsumes another company, leaving only the buyer in place. In most mergers, both companies merge to form an entirely ...
  6. As the number of new employees increases, the marginal product of an additional employee will at some point be less.
    Investing

    More is Less: Diminishing Marginal Returns

    In formal economic terms, the law of diminishing marginal returns states that as the number of new employees increases, the marginal product of an additional employee will at some point be less ...
  7. Typically, SPEs are subsidiaries of a larger corporation.
    Investing

    How Special Purpose Entities Help Fight Risk

    A special purpose entity, sometimes called a special purpose vehicle, is a legal entity created for one very limited, particular task. Typically, SPEs are subsidiaries of a larger corporation.
  8. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
    Professionals

    What is a SWOT Analysis?

    SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. SWOT analysis is a management tool used to identify strategies for success. It may be used to guide individual thinking, group ...
  9. Accounting is the recording of financial transactions of a business or organization.
    Professionals

    What is Accounting?

    Accounting is the recording of financial transactions of a business or organization. It also includes the process of summarizing, analyzing and reporting these transactions in financial statements.
  10. What's a Multinational Corporation?
    Investing

    What's a Multinational Corporation?

    A multinational corporation is just that – a corporation that operates in multiple nations, with a home office that coordinates global management. Being a multinational corporation is a complicated ...

You May Also Like

Hot Definitions
  1. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  2. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  3. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  4. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  5. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
  6. Special Administrative Region - SAR

    Unique geographical areas with a high degree of autonomy set up by the People's Republic of China. The Special Administrative ...
Trading Center