Electronic Exchanges

1. An Era of Creative Destruction

Executive Summary

This chapter presents a quick history of exchanges, their purpose, and their development. It delves into the process of floor-based trading, the system used for well over a century on exchanges such as the New York Stock Exchange (NYSE) and the Chicago Board of Trade (CBOT). Then it explores the technological innovations that led to the development of electronic exchanges and gives an overview of its process and implications for the future.

Introduction

The book has a primary and a secondary purpose. The primary purpose is to tell the fascinating and important story of how and why those institutions we call exchanges have begun to bear no resemblance to their former selves, of how the stock and ...