only one specialist for any particular stock on an exchange, there is no
need for multiple methods of execution or secondary market systems (as
found with trading NASDAQ issues). This situation makes executing
listed stock simple. You can trade listed stocks either directly or through
your broker. In order to trade a NYSEllisted stock directly, your brokerage
firm must give you access to Designated Order Turnaround (DOT) or to
SuperDOT. (Access is available only if you are affiliated with a licensed
broker-dealer; in other words, if you have a trading account with a brokerage
firm or have your own broker-dealer license.) DOT is an electronic
execution system for listed stocks. The system is similar to an e-mail
system in that it can send your order directly to the specialist's post.
You can also check the status of your order by using this system. When placing
an order on DOT, you must include 1) the price at which you are willing
to buy or sell shares and 2) the amount of shares that you are willing
to buy or sell (also known as the size). The DOT system is a direct-access
system because it bypasses the retail broker and gives the trader direct
access to the exchange and specialist who is making a market in that
stock. Several brokerage firms offer the DOT system to their customers.
If you plan on trading a listed stock, make sure that you have access to
the DOT system. The system is straightforward, and everyone can use it
to participate. The DOT system offers limit order protection and offers
instantaneous access to the specialist. The listed exchanges are the oldest
exchanges in the world and remain successful because oftheir simple and
clean methods of executing stock. As technology increases, you might see
more electronic systems such as DOT implemented on the listed exchanges.
At this writing, the Pacific Exchange (PCX) created a partnership
with Archipelago-thus creating the first fully electronic listed
exchange in the United States. Archipelago will merge many of its electronic
execution systems and electronic communication networks (ECNs)
with PCX, enabling the customers more access to the marketplace at
lower costs and increasing the speed of execution. We are sure that this
technology is the tip ofthe iceberg in the new electronic listed exchanges,
and other exchanges will probably follow a similar course.
Read More: Executing New York Stock Exchange (NYSE) Orders
