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How the American Stock Exchange Works

The American Stock Exchange (Amex) lists roughly 1,350 securities and has a daily trading volume of about 83 million shares. Amex lists stocks that are smaller in size than those on the NYSE yet still have a national following. Many firms that first list on Amex work to meet the listing requirements of the NYSE and then switch over.

Trades on the Amex are handled through an automated or manual order processing system. In the automated system, orders are routed electronically to specialists, virtually eliminating the use of paper on the trading floor.

Using a system called the Booth Automated Routing System (BARS), transactions are electronically captured, and reports to member firms are generated. Rather than the specialist’s order books, Amex uses a New Equity Trading System (NETS) to collect information about the trades and automate the process of updating and matching orders, quoting and reporting trades, and regulating and researching order details.

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Orders also can be placed manually by calling the floor broker by phone. Manual order processes usually are initiated for large or complex orders. Specialists in a stock help to assemble the buyers or sellers for these orders.

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