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Floor Trader
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles
J Woelfel
(We recommend this as work of authority.)
Floor professionals on the
trading floor of the NEW YORK STOCK EXCHANGE include the following:
-
Commission brokers, employed
by member firms to represent their customers' orders on the trading
floor.
-
Floor brokers, primarily
individual entrepreneurs, who act as independent commission brokers
for a variety of clients.
-
Registered competitive market
makers (RCMM), who have specific obligations to trade for their own
or their firms' accounts when called upon by an exchange official
by making a bid or offer that will narrow the existing quote spread
or improve the depth of an existing quote.
An RCMM may also be asked to assist a commission broker or
a floor broker in executing a customer's otherwise unexecutable order.
-
Competitive traders, who
trade for their own accounts, under stringent exchange rules designed
to assure that their activities contribute to market liquidity.
On January 19, 1977, the SECURITIES AND EXCHANGE COMMISSION
(SEC) approved this new designation of "competitive traders"
for those members who contribute to liquidity and continuity on the
floor by trading for their own account and also approved new minimum
access requirements for this category of membership.
-
Stock specialists, key exchange
members who are responsible for the maintenance of fair and orderly
markets in exchange-listed stocks assigned to them by acting as agent
and principal in such stocks, in accordance with close SEC and New
York Stock Exchange rules and policies.
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