Trading began in meeting points such as coffee shops; it became more formalised when stock exchanges were formed, where trading would be conducted on a face-to-face basis. For some marketplaces that have been formed in more recent times, telephone has been the sole medium for conducting trading. Today, some face-to-face marketplaces still exist, others have become mainly telephone based, and some marketplaces operate on an electronic basis.
This chapter describes:
in order to convey the sequential steps involved in trade execution and capture.
An order is a request to buy or sell securities, given by an investor (such as an institutional client) to an STO, or to an agent for investors. Usually, some (but not all) of the trades executed by STOs are originated by orders from its institutional clients.
Orders contain a number of standard features, such as the request to:
and will contain a number of features that are relevant to the price, including: