In this paper we will discuss about intermarket trading system (ITS). This is basically a electronic trading network which interconnects several stock exchanges of US. ITS enables the brokers to choose the best market. Of late, the importance of intermarket trading system has gone down due to the introduction of NMS linkage, another computerized trading system.
The intermarket trading system is basically a computerized trading network which establishes a connection between some big stock exchanges of US, like Boston Stock Exchange, Philadelphia Stock Exchange, New York Stock Exchange, Chicago Board Options Exchange, NASDAQ etc. The Securities Industry Automation Corporation governs the intermarket trading system
A broker at one stock exchange may place an order to another stock exchange, where the prices of shares are high, through the intermarket trading system.
This system helps the traders to choose the best market with respect to a particular transaction. The introduction of intertmarket trading system has increased the market competition because it connects more than one stock exchange together.
Now a day, intermarket trading systems are not been used frequently and another trading system, named NMS Linkage, has captured the market. In fact, the NASDAQ withdrew itself from the intermarket trading system in the beginning of 2005.