The American Stock Exchange (AMEX) is the third largest stock exchange in the United States. The AMEX is located in New York and handles approximately 10% of all securities traded in the States. Almost all trading on the AMEX is in small-cap stocks and derivatives.
The American Stock Exchange is an auction market where prices for a diverse array of products--stocks, options, exchange traded funds (ETFs) and structured products--are determined by public bids to buy and offers to sell. The American Stock Exchange has established certain quantitative and qualitative standards for initial listing.
The AMEX trading technology encompasses two systems. The Booth Automated Routing System (BARS) aims to increase efficiency in order flow management, including the ability for member firms to electronically route orders directly to a floor broker's wireless hand-held terminal for faster execution, reporting and clearing.
To enhance speed and transparency, the New Equity Trading System (NETS) is an enhanced specialist display book that accelerates the trading process and provides greater functionality and automation for updating and matching orders, quoting and reporting trades, regulating, and researching order details. Main features of NETS include:
- Ability to trade any equity-based product in the U.S.
- Speedier point-and-click functionality of all transactions with a guaranteed locked-in trade
- Automated tick-sensitive orders, and stop and stop limit order types
Trading involves parties at AMEX, such as specialists, brokers, and floor traders. Trading in every Amex security is overseen by a specialist located on the trading floor. The specialist may play many roles, such as a facilitator, auctioneer, or agents or brokers' brokers. Registered traders, or market makers, serve as a source of liquidity for securities traded on the AMEX. They trade for their own account and enhance the specialists' role of providing price continuity and liquidity on both sides of the market. Floor brokers, who may be either commission or independent brokers, are members of the Exchange who try to get the best price for their customers. Members can send orders to floor brokers, who execute the orders on the trading floor.