WHAT IS 'Designated Order Turnaround - DOT (SuperDOT)'

Designated order turnaround is an electronic system that increases efficiency by routing orders for listed securities directly to a specialist on the trading floor instead of through a broker. Designated order turnaround is also known as DOT or SuperDOT.

BREAKING DOWN 'Designated Order Turnaround - DOT (SuperDOT)'

Designated order turnaround is an order routing system formerly used by the New York Stock Exchange (NYSE) in which orders are sent directly to a specialist on the trading floor, thus bypassing the broker. Since the 1970s, most of the orders in the NYSE have been transmitted electronically to specialists' screens via the DOT. The DOT system is commonly used with small order entries, such as limit orders, and basket and program trades.

Automated trading systems like the SuperDOT have the capacity to execute orders with both speed and accuracy, and these systems help lower the number of errors by removing human intervention in the order-handling process. Automated trading systems also provide another layer of security against fraud, thereby helping to control risk. The system also allows for greater volume on the floor by bypassing commission brokers.

Within the DOT system, the user, either an investor or a broker, enters the order directly into the system, which then immediately reaches the specialist. Once the order is executed, the user receives a confirmation report of the transaction in real time. Most individual investors do not have direct access to the SuperDOT system, however they indirectly access the system through software or online services offered by brokerage companies that then place the client orders into the SuperDOT.

The Super Display Book

The DOT or SuperDOT was replaced by a system known as the Super Display Book (SDBK) in 2009. The SDBK is the NYSE’s automated system that displays, records and executes orders for securities.

The SDBK order-routing system is a sophisticated computer program that facilitates the transmission of both market and limit orders directly to the trading post, and designated market makers, where a particular security is traded. This system allows for a more efficient transaction because the order can be delivered directly to the market maker rather than phoned down to a floor trader and executed manually. Automated systems like SDBK execute orders with speed and accuracy and help control risk.

Floor brokers rarely handle orders placed by individual investors. Instead, these orders are routed through the SDBK directly to a market maker for immediate execution. Floor brokers usually handle the larger, more complex institutional trade orders.

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