What is ‘Off-Floor Order’
An investor’s directive to buy or sell securities when that directive is given to a broker, not to a trader working on the trading floor of an exchange. Exchange rules require off-floor orders, which are made on behalf of customers, to be executed before on-floor orders, which are made for exchange members’own accounts. In some cases, an off-floor order can be reclassified as an on-floor order where a conflict of interest might exist.
Explaining ‘Off-Floor Order’
To be a floor trader, one must be associated with a member firm. Member firms pay hefty fees for the privilege of trading on the floor.
Further Reading
- Market vs. limit orders: The SuperDOT evidence on order submission strategy – www.jstor.org [PDF]
- The trades of NYSE floor brokers – www.sciencedirect.com [PDF]
- Market making, the tick size, and payment-for-order flow: theory and evidence – www.jstor.org [PDF]
- Order dynamics: Recent evidence from the NYSE – www.sciencedirect.com [PDF]
- NYSE order flow, spreads, and information – www.sciencedirect.com [PDF]
- The role of floor brokers in the supply of liquidity: An empirical analysis – onlinelibrary.wiley.com [PDF]
- Financial innovations and the organisation of stock market trading – ojs.uniroma1.it [PDF]
- Order flow, dealer profitability, and price formation – www.sciencedirect.com [PDF]
- Constructing a market, performing theory: The historical sociology of a financial derivatives exchange – www.journals.uchicago.edu [PDF]
- Should securities markets be transparent? – www.sciencedirect.com [PDF]
