The New York Stock Exchange

The NYSE is the largest U.S. stock exchange as measured by the market value of listed firms. In 2006, the NYSE merged with the Archipelago Exchange to form a publicly held company called the NYSE Group, and then in 2007, it merged with the European exchange Euronext to form NYSE Euronext. The firm acquired the American Stock Exchange in 2008, which was renamed NYSE Amex and focuses on small firms. More than 3 billion shares trade daily on the NYSE. NYSE Arca is the firm’s electronic communications network. In 2013, NYSE Euronext was acquired by Intercontinental Exchange (ICE), whose main business to date had been energy-futures trading. ICE has retained the NYSE Euronext name.

The NYSE was long committed to its specialist trading system, which relied heavily on human participation in trade execution. It began its transition to electronic trading for smaller trades in 1976 with the introduction of its DOT (Designated Order Turnaround) and later SuperDOT systems, which could route orders directly to the specialist. In 2000, the exchange launched Direct+, which could automatically cross smaller trades (up to 1,099 shares) without human intervention, and in 2004, it began eliminating the size restrictions on Direct+ trades. The change of emphasis dramatically accelerated in 2006 with the introduction of the NYSE Hybrid Market, which allowed brokers to send orders either for immediate electronic execution or to the specialist, who could seek price improvement from another trader. The Hybrid system allowed the NYSE to qualify as a fast market for the purposes of Regulation NMS but still offer the advantages of human intervention for more complicated trades. In contrast, NYSE’s Arca marketplace is fully electronic.

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