What is 'Nasdaq Intermarket'

Nasdaq Intermarket is a system that was implemented and managed by Nasdaq to allow for networking, communication and trading activity among those participating in several markets via an electronic means. This network utilized the intermarket trading system (ITS), which is an electronic network linking the trading floors of several markets, allowing real-time communication and trading between them. This ITS platform allows any broker on the floor of one of the participating exchanges to coordinate an execution, reacting immediately to price changes. The ITS is managed by the Securities Industry Automation Corporation (SIAC).

BREAKING DOWN 'Nasdaq Intermarket'

Nasdaq Intermarket was an electronic marketplace where National Association of Securities Dealer  members could execute trades, communicate, and receive quotations on stocks listed on the New York Stock Exchange and the American Stock Exchange ). Formerly known as Nasdaq's third market, Nasdaq Intermarket used Nasdaq's Computer Assisted Execution System to connect buy and sell orders.

Nasdaq Intermarket competed for retail stock orders with regional exchanges such as the Chicago Stock Exchange (CHX) and the Boston Stock Exchange (BSE). By connecting several stock exchanges, the intermarket system gave traders access to additional buyers and sellers, increasing liquidity and competition, and increasing available investing capital.

History of Nasdaq Intermarket

Nasdaq had been a part of the ITS since its creation in the 1980s, but in 2005, Nasdaq announced its intentions to withdraw from the ITS the following year. The ITS was originally created when most trading was done via a manual process by floor-based traders. Technological advances since that time have introduced new and more innovative systems for conducting trade activity in a fast, connected atmosphere. In announcing its withdrawal from the ITS, Nasdaq cited the outdated setup of the system, and said a private, more efficient and high-tech linking system would be a better option. That position aligned perfectly with Nasdaq’s recent acquisition at that time of Brut, LLC, which maintained an electronic communications network.

Nasdaq now has a platform called the Nasdaq Market Center, which uses Brut tools in an electronic communications network, or ECN. This ECN can enable automated, electronic communication and activity. Brut systems are linked to other market centers trading Nasdaq securities, along with national securities exchanges such as the NYSE. Since its acquisition of Brut, Nasdaq has integrated that system with other tools including SuperMontage and INET to form a comprehensive system that was at one point known as Single Book, later to be referred to as the NASDAQ Market Center Execution System.

  1. Intermarket Analysis

    Intermarket analysis looks at related asset classes or financial ...
  2. Intermarket Sector Spread

    Intermarket sector spread is the yield spread between two fixed-income ...
  3. Nasdaq National Market Securities ...

    The NASDAQ National - Nasdaq NM is the market, comprising more ...
  4. Intermarket Surveillance Group ...

    An international group consisting of North American, Asian and ...
  5. Intermarket Surveillance Information ...

    A publicly-accessible electronic database in which securities ...
  6. Intermarket Spread Swap

    An Intermarket spread swap is a swap transaction meant to capitalize ...
Related Articles
  1. Insights

    How Nasdaq Makes Money

    NASDAQ provides a marketplace which offers money-making opportunities to investors. Investopedia explains how NASDAQ makes money.
  2. Trading

    The Advantage Of Intermarket Analysis

    Analyzing a variety of markets around the world can provide powerful insight into trading opportunities.
  3. Trading

    Intermarket relationships: Following the cycle

    Learn more about the interactions between commodity, bond, stock and currency markets.
  4. Investing

    Intermarket Analysis: Pinpointing Reversals And Confirming Trends

    Learn how to confirm your analysis based on intermarket trends by watching global markets and particular stocks to pinpoint reversals.
  5. Investing

    Why Do Companies Choose NASDAQ for Their IPO?

    The NYSE is known for its prestige so why do some companies opt to list on the NASDAQ instead?
  6. Insights

    Nasdaq Goes to Bat for Company Founders

    Jeff Thomas, Nasdaq's head of West Coast operations, outlines why the exchange is making a case for startups.
  7. Trading

    Electronic Trading Tutorial

    Learn about the systems that run the market.
  8. Insights

    What's The Difference Between The Dow And The Nasdaq?

    The way people throw around the words “Dow” and “Nasdaq” makes them seem synonymous with “the market.” But there are important differences.
  9. Tech

    Nasdaq CEO Hints at Future Cryptocurrency Exchange

    Nasdaq may consider becoming a cryptocurrency exchange, pending regulation.
  1. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    Discover some of the primary advantages and disadvantages that exist for companies listed on the Nasdaq exchange rather than ... Read Answer >>
  2. What does it mean when my broker says that shares are for auction?

    An auction market is one in which stock buyers enter competitive bids and stock sellers enter competitive offers at the same ... Read Answer >>
  3. Move from an OTC to a major exchange

    In order to move a company from over-the-counter market to a major exchange, a number of conditions must be met to being ... Read Answer >>
  4. Why are Traders on the Floor of the Exchange?

    Learn how trading on the floor of the stock exchange has evolved over time with computers now managing the majority of buying, ... Read Answer >>
  5. What are the listing requirements for the Nasdaq?

    Learn what it takes to be on the Nasdaq. Only companies with a solid history and top-notch management behind them are considered. Read Answer >>
  6. On what days are the American stock exchanges closed?

    Similar to most businesses, the major stock markets in North America are open for trading on normal business days only (excepting ... Read Answer >>
Trading Center