Financial Mangement Essay Example | Topics and Well Written Essays - 750 words

Financial Mangement - Essay Exampleelectronic stock market. With approximately 3,300 companies, the NASDAQ lists to a greater extent companies and, on average, trades more shares per day than any other U.S. market (NASDAQ, 2006, n/p).Therefore, the AMEX is a unmistakable physical entity, it occupies its own building and has physically designated space for calling - trading traumatize has specifically designated members and an take governing body. On the contrary, the NASDAQ, which means National Association of Securities Dealers Automated Quotation form, is a nebulous, intangible government built up around the computerized system.The American Stock Exchange, according to its own definition, is an auction market where prices for a diverse array of products - stocks, options, exchange traded funds (ETFs) and structured products - are determined by public bids to vitiate and offers to sell. The major characteristics of the trading process at the AMEX include centralization of the commit ply on the trading horizontal surface, priority given to the public orders, and execution of the orders by price and time successiveness regardless of size or source. (AMEX, 2006, n/p).Like the AMEX, the NASDAQ operates as an auction market, but it has its own peculiarities no physical trading floor is available and the orders flow goes solely through the automated quotation system. Additionally, strange the AMEX specialists the NASDAQ dealers often maintain an inventory of the stocks that are traded less frequently.The AMEX system includes specialists, registered traders and floor dealers transaction in every check security measure is overseen by a specialist stationed on the trading floor . . . Specialists serve as facilitators, employing their extensive knowledge of the market in a security to bring together buyers and sellers, and helping them trade directly with each other. This skill is particularly important when large blocks of securities are brought to the floor (AMEX, 2006, n/p).On the contrary, at the NASDAQ over-the-counter market trading in a particular security is not concentrated in the hands of the one particular specialist, and there is no monopoly, as the result. every of the dealers interested in trading in this security can handle the orders on it.Trading at the AMEX can be performed in two ways the orders can be processed each automatically, or manually. The automatic processing uses various systems as followsMember firms may route orders directly to the Exchanges trading floor through the Common Message Switch (CMS). After performing specific validation checks, CMS routes the orders to the Amex Order File (AOF), which retains order details and directs orders to the New Equity Trading System (NETS), Amex Options bring out Book (AODB), Automatic Execution (Auto-Ex), or the firms floor talk terms through the Booth Automated Routing System (BARS) (AMEX, 2006, n/p).The orders may also be submitted manually by phone call to the broker or with help of a member firms proprietary application In both cases, immediately upon receipt, the floor broker will systematize the order by entering it into the Amex Order File using the order entry feature of the Booth Automated Routing System (BARS) terminal. Once systematized these orders may be printed and