Floor trading

Floor trading

Traditional trading platform in which market participants meet in person on the trading floor at designated times to execute own-account or customer transactions.

The primary forms of communication used on the trading floor are speech and gestures; traders match orders by shouting them out and using hand signals (open outcry). According to the customs and usage of the trading floor, the spoken word or agreed-upon hand signals are sufficient to make the transaction legally binding.

Market participants on the trading floor are exchange traders, exchange brokers and independent brokers. Exchange brokers perform their activities on the trading floor in separate enclosed areas, at so-called trader's desks; exchange brokers and independent brokers must approach the trader's desks to execute their transactions.

In Germany, there are currently eight exchanges where securities are traded on the floor (all of which are cash markets):

FWB Frankfurter Wertpapierbörse

Rheinisch-Westfälische Börse in Dusseldorf

Bayrische Börse in Munich

Hanseatische Wertpapierbörse in Hamburg

Baden-Württembergische Wertpapierbörse in Stuttgart

Berliner Wertpapierbörse

Niedersächsische Börse in Hannover

Bremer Wertpapierbörse.

The counterpart to the traditional floor trading system is the electronic, computer-based trading system, which is gradually phasing out floor trading. For example, at FWB® Frankfurter Wertpapierbörse, cash trading can also take place in the electronic trading system Xetra® , which now accounts for more than 90 percent of turnover in the DAX®shares.

Antonym: computer-based trading system