SuperDOT is a method to get NYSE orders to the floor of the exchange (i.e. to the specialist) quickly. Once the specialist has the order, he manually must put the order on his electronic order book, or if marketable, match it against an existing order to execute the order. Virtually all small orders are handled this way.
Large orders, by contrast, are called down to the brokerage firms floor broker. The floor broker then walks over to the IBM post, for example, and discusses the status of the stock with the specialist in an attempt to get the best price.
Floor broker: "Hey Bob, what's the market in IBM?"
Specialist: "90 1/8 bid, 1/4 offered, with a size of 5000 by 20,000."
Floor broker: "At what price can I get 50,000 (shares)?"
Specialist: "I can get you 20,000 at 1/4, 20,000 at 3/8, and the last 10,000 at 1/2"
Floor broker: "Sold"
=> This way, the floor broker is better able to work the order for his customer by understanding the depth in the stock and find the best way to execute the size of the order.
Have a great weekend,
-Eric |
