Businesses do have an appropriate place where they try to establish their equity, futures, commodities, fixed income, sell securities and more. This same literal area is where traders buy and sell the securities in behalf of those client of financial firm that has employed them. When the exchange takes place it often is referred to as pit but that room is commonly known as trading rooms. These rooms have different securities and designed to have roughly circular areas where traders could step down into so they could engage in the actual trading.
As the actual trade takes place, there will only be one method used on the entire trading flow of the activity. They are calling that method as the open outcry. If it was an electronic type of trade, this stands as stark contrast so they basically are somehow the same but they are done in different platforms.
The first thing they get to do is bidding and offering. They usually are just doing this through verbally communicating the information regarding the deal. Often times they will be seen shouting these details or trying to do gestures to make the other parties understand what they are trying to imply. Hosts does hand signals too to communicate.
When the offers and bidding has been done and there have been a trader who confirmed their interest on the deal, the next thing that would happen is making contracts. This by the way are informal types of contracts and has no specific legal ties. Though, even with that fact traders still have to critically abide to what are the stated agreements within those papers because they have their integrities.
Both traders who decides to buy and sell the deal has to keep a record of their trading separately. They initially do not have it solely. This allows them to ensure and take note of their trade actions.
When both parties have confirmed their trades, both of them reports their side of the record they took note of on the deal. They do this in the clearing house. And the clearing house will be attempting to match both deals until such time each side has bear a non comparison risk.
If this happens to be successfully match then both parties will acknowledge that claim. However, when the in charge was not able to match the deals for both party, it will lead into out trade. When an out trade is declared, it means there has been a misunderstanding in between both traders involved or there were error the clerks have made.
Types of traders to vary and they all have different definition and roles. Some of them are named floor broker, usually they are just representatives asked to be an advocate in behalf of their clients. They only will do thing or decide based on how they were ordered and instructed.
Scalpers are common as well. They are the independent type of traders who looks for imbalances on the flow. They normally will use that temporary balance to their advantage and make a profit out of that.
As the actual trade takes place, there will only be one method used on the entire trading flow of the activity. They are calling that method as the open outcry. If it was an electronic type of trade, this stands as stark contrast so they basically are somehow the same but they are done in different platforms.
The first thing they get to do is bidding and offering. They usually are just doing this through verbally communicating the information regarding the deal. Often times they will be seen shouting these details or trying to do gestures to make the other parties understand what they are trying to imply. Hosts does hand signals too to communicate.
When the offers and bidding has been done and there have been a trader who confirmed their interest on the deal, the next thing that would happen is making contracts. This by the way are informal types of contracts and has no specific legal ties. Though, even with that fact traders still have to critically abide to what are the stated agreements within those papers because they have their integrities.
Both traders who decides to buy and sell the deal has to keep a record of their trading separately. They initially do not have it solely. This allows them to ensure and take note of their trade actions.
When both parties have confirmed their trades, both of them reports their side of the record they took note of on the deal. They do this in the clearing house. And the clearing house will be attempting to match both deals until such time each side has bear a non comparison risk.
If this happens to be successfully match then both parties will acknowledge that claim. However, when the in charge was not able to match the deals for both party, it will lead into out trade. When an out trade is declared, it means there has been a misunderstanding in between both traders involved or there were error the clerks have made.
Types of traders to vary and they all have different definition and roles. Some of them are named floor broker, usually they are just representatives asked to be an advocate in behalf of their clients. They only will do thing or decide based on how they were ordered and instructed.
Scalpers are common as well. They are the independent type of traders who looks for imbalances on the flow. They normally will use that temporary balance to their advantage and make a profit out of that.
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