Intermarket Trading System (ITS)

What Was the Intermarket Trading System (ITS)?

The Intermarket Trading System (ITS) was an electronic network that linked the trading floors of nine American stock exchanges. Brokers and market creators on any of the linked exchanges could utilize ITS to find and execute the best price that anyone could hope to find. A broker on the floor of one exchange could straightforwardly place an order through ITS instead of going through a broker on another exchange.

The ITS linked prices on the New York Stock Exchange (NYSE), the American Stock Exchange, the Boston, Chicago, Cincinnati, Pacific, and Philadelphia exchanges, as well as the Cboe Options Exchange (Cboe) and the National Association of Securities Dealers (NASD). In 2000, the NYSE stopped utilizing ITS and Nasdaq stopped involving it in 2006.

Understanding the Intermarket Trading System (ITS)

The Intermarket Trading System (ITS) started operations in 1978, while trading was a manual cycle handled by traders working on a trading floor.

ITS begun being phased out in 2000 when the NYSE concluded it would never again be utilizing the old-fashioned system. Strikingly, the Nasdaq left the partnership in 2006, having concluded that the technology was obsolete and, regardless, was unacceptable to an exchange that doesn't have a trading floor.

From that point forward, new and more creative systems have arisen for directing trade activity in a fast, associated environment.

In declaring its withdrawal from the ITS, Nasdaq refered to the obsolete setup of the system and said a private and all the more technically advanced system would be a better option. That position adjusted flawlessly with Nasdaq's then-new acquisition of Brut LLC, which kept an electronic communications network.

Its withdrawal from the ITS permitted the Nasdaq to work on its technology and order-directing systems without expecting to go through an endorsement interaction that included different exchanges. Private linkage likewise empowered Nasdaq to better handle the rising flow of orders coming from electronic traders.

The Nasdaq presently has a platform that utilizes an electronic communications network, or ECN. The ECN empowers open-access communication and trading activity. Systems are linked to other market centers that are trading Nasdaq securities, alongside other national securities exchanges, including the NYSE.

Nasdaq has integrated its ECN system with different instruments, including SuperMontage and INET, to form a complete system that came to be known as the Nasdaq Market Center Execution System.

Features

• Brokers and market producers on any of the linked exchanges could utilize ITS to find and execute the best price that anyone could hope to find.
• The Intermarket Trading System (ITS) was an electronic network that linked the trading floors of nine American stock exchanges.
• As electronic trading on stock exchanges turned out to be further developed, ITS was phased out. The NYSE stopped involving it in 2000 and Nasdaq in 2006.