What are voice broker trades?

The fundamental task of a voice broker is to communicate prices between buyers and sellers, and used to be the only way to trade the foreign exchange markets. The task of communicating prices has largely been replaced  by electronic trading systems, starting with the Reuters Dealing 2000-1.  Quotes and trades were executed electronically through the 2000-1 with less errors and faster execution resulting in fewer trading disputes.

You would have a difficult time finding a broker still using the Reuters Dealing 2000-1, however there are a number of brokers still offering services through a voice broker. A voice broker today is more commonly referred to as an interdealer broker. Interdealer brokers do more than communicate prices, they make deals. An interdealer broker develops and maintains working relationships that puts them in a position to match buyers and sellers.

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Tags: Broker