American Stock Exchange (AMEX), birthplace of the ETFs

Long before it was called the American Stock Exchange, AMEX was known as the “Curb Market” because trading was conducted by the curb on Broad Street, right by the well-established New York Stock Exchange.

The Curb Market took off with California’s 1849 Gold Rush, handling stocks issued by booming mining companies too young to merit a listing on the NYSE. At times, the Curb attracted some big winners, such as Standard Oil. In 1921, the Curb moved indoors to a building at Trinity Place and changed its name to the American Stock Exchange in 1953.

NASD purchased AMEX in 1998 but transferred control back to The Amex Membership on January 3, 2005, paving the way for the election of the a new Board of Governors.

AMEX is one of six U.S. exchanges trading equity options but is best known for its pioneering role in exchange-traded funds, which it launched in 1993 with an ETF based on the main S&P index and known as the Spiders. Today, AMEX lists 144 ETFs.

AMEX is a specialist-manned, floor-based auction market but it is developing more electronic functionality:

- The exchange reported that nearly 75 percent of equity trading is conducted electronically. BARS (Booth Automated Routing System) helps order flow management and directs orders straight to floor brokers’ handless devices

- NETS, or New Equity Trading System, is an enhanced specialist display book that provides automated order update and order matching

- AMEX last year launched ANTE (Amex New Trading Environment), an options platform that supports the exchange’s hybrid model, combining electronic trading and the floor-based auction process

- AMEX provides detailed information with its ETF screener, allowing to compare ETFs by issuer, style, expense ratio, net assets, price and total return

- HOLDRS (Holding Company Depositary Receipts) are other relatively new securities listed on AMEX. They are mostly sector-based securities that represent ownership of the common stock or ADR in specific companies in that group. AMEX also offers trading in structured debt products

In January, AMEX Chairman and CEO Salvatore Sodano announced he was retiring. This may usher in a new era for AMEX, including greater automation of some of its product lines, in particular the ETFs—a favorite among arbitrage traders.