What development has electronic trading brought to the execution of trades?

• A. Most trades are now executed by machines rather than on physical pits.
• B. Trading floors have expanded and dominate.
• C. Open outcry auctions are the primary method.
• D. All trades require manual confirmation.

Answer: (A)

Electronic trading has automated the execution process, so computers handle order routing and matching rather than human traders on a physical pit. This shift means that buy and sell orders are paired by matching engines and algorithms in electronic venues, delivering speed, precision, and consistent price discovery through visible order books. As a result, most trades are now executed by machines rather than by shouting on a trading floor, which has led to a decline in the importance and use of traditional pits.

The old open outcry method is no longer the primary driver in most markets, and trading floors have largely diminished in role rather than expanding. While some human oversight and post-trade checks remain, the core flow of trade execution is handled automatically through electronic systems, bringing efficiency and broader access to participants.