Definition
The term on-floor refers to an order that is placed by a member of an exchange to trade securities in their account. On-floor orders typically refer to the trading of equities.
Explanation
When a member of an exchange places an order to trade stocks in their account, the transaction is referred to as an on-floor order. More commonly, these transactions are placed through brokers, and are referred to as off-floor orders.
Floor traders have a business relationship with member firms, which pay substantial fees for the right to trade on the exchange floor. However, exchange rules require the execution of off-floor transactions before on-floor orders.
Related Terms
Do Not Reduce orders, Not-Held orders, order book, Small-Order Execution System, order imbalance, switch orders, held orders, fractional discretion orders
