DEFINITION of Board Broker System
A board broker system was a system used by commodity exchanges in which agents are assigned specific commodities for which they are to manage the trading. A board broker is similar to a specialist or market maker on a stock exchange in that they quotes prices and matches and executes orders. The board broker helps to create a liquid market for commodities and facilitates efficient trading.
BREAKING DOWN Board Broker System
A board broker system is similar to the systems used in large stock markets, such as the Nasdaq and NYSE. The goal of this system is to provide liquidity for contracts with minimal transaction costs.
The term "board broker" is no longer widely used and some boards, including the Chicago Board Options Exchange, no longer use board brokers because computers can handle their responsibilities in fractions of a second.