 | This articleneeds additional citations forverification. Please helpimprove this article byadding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Floor broker" – news ·newspapers ·books ·scholar ·JSTOR(July 2023) (Learn how and when to remove this message) |
Afloor broker also known as a "Pit broker" is an independent member of anexchange who can act as a broker on thetrading floor.[1] They would act on behalf offloor traders or large clients such as financial firms, as anagent on the floor of the exchange.[2] With the advent ofelectronic trading in the 1990s and the closing of physical trading floors, this role has largely disappeared.
The floor broker used to receive an order viaTeletype machine from their firm's trading department and then proceeds to the appropriate trading post on the exchange floor. There he would join other brokers and thespecialist in thesecurity being bought or sold and executes the trade at the best competitive price available usingopen outcry. On completion of the transaction the customer is notified through hisregistered representative back at the firm and the trade is printed on the consolidatedticker tape which is displayed electronically around the country. A floor broker should not be confused with afloor trader who trades as aprincipal for their own account, rather than as a broker.Commission brokers were employees of a member firm.
