Arizona Stock Exchange: Difference between revisions

Arizona Stock Exchange
Type	Electronically enabled stock exchange
Location	Phoenix, Arizona, United States
Founded	1990 as Wunsch Auction Systems in New York City and Minnesota
Closed	October 2001; 23 years ago
Key people	Steve Wunsch (founder)

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The Arizona Stock Exchange (AZX) was an electronically enabled stock exchange for extended-hours trading. It was founded in 1990^{[citation needed]} as Wunsch Auction Systems^[1] by R. Steven Wunsch,^[2] and moved from New York City to Arizona in 1992. It closed in October 2001 due to lack of trading volume.

History

1990-1991: Founding

The exchange was founded in 1990^[3] as Wunsch Auction Systems^[1] by R. Steven Wunsch,^[2] formerly of Kidder Peabody.^[4] The computers were based in Minneapolis, Minnesota, with the headquarters in New York City.^[2] The technology trading center in Minnesota was built and run by a group of former Cray Research Supercomputer technologists that included Christopher Moran, Gray Lorig, Kerry Yndestad and Paul Sustman.^{[citation needed]} Due to the exchange's low trading volume^[5] and small size, the Securities and Exchange Commission exempted Wunsch and the exchange from regulations,^[2] and it went unregistered.^[5] The system was an electronic auction for online trading of NYSE, AMEX, and NASDAQ stocks for after-hours trades. The system was not intended for individual investors, but rather large trader entities.^[5]

It got off to a "slow start" on Wall Street as a computerized stock trading systems that bypassed "traditional" exchange systems.^[6] The company was fought by the New York Stock Exchange. As of December 25, 1991, the exchange allowed about 3,100 stocks to be traded during a day, and the system had 56 customers that were institutions. It also had smaller activity than it needed, with Wunsch saying it needed about 24 customers a day placing orders to attract steady business, while it regularly had no more than a dozen customers per day place orders.^[2]

As of 1991, it offered two auctions each day, one taking place a half-hour before the opening of the NYSE, and the other a half-hour after the NYSE closed.^[7] The exchange sought to connect bidders and sellers with set desired trade prices, with investors able to go to the other exchanges, either NYSE or regional, if no match was found.^[7] Over six months in 1991, Wunsch signed about four dozen institutional investors, with the New York Times describing the project as "the nation's first electronic stock-trading network to be designated a bona fide stock exchange by the Securities and Exchange Commission."^[7] It was not the first electronic exchange,^[8] but it was the first one set up to directly compete with traditional stock exchanges via price "discovery" in a bidding process.^[7] Traditional exchanges "cried foul" over the new exchange, according to the New York Times, with regulators being asked to reconsider what "constitutes a stock exchange."^[7] It was worried that although the new exchange had a tiny amount of business, it "theoretically could supplant the Big Board for the large institutional investors." Officials at the NYSE and other exchange argued that the best, easiest trades would be "cherrypicked" by the new exchange.^[7] Also, it "threatens to undermine" the NYSE's role as the price setter for corporate shares, according to the New York Times.^[8] Later in 1991, 125 institutional investors had signed on.^[8]

1991-1992: Move to Arizona

In June 1991, the governor of Arizona signed legislation for the state to establish a stock exchange. In December 1991, the state of Arizona approved of Wunsch moving his online electronic auction to Phoenix, Arizona from Wall Street and rename it the Arizona Stock Exchange, or AZX.^[2] Formerly Wunsch Auction Systems, Inc. it was later operated by AZX, Inc.^[1] Arizona received up to $2 million in loans from Arizona, as well as promotion, to serve as incentive for moving to the state. Although Wuncsch asserted that the new exchange was not another regional stock market, Arizona officials said they hoped local small and medium companies would gain exposure. It was said the office in Arizona would become active in February 1992.^[2] Trading commenced on March 30, 1992.^[1]

1993-2001: Auctions and closure

In April 2001, the SEC granted the Arizona Stock Exchange permission to hold one of its 30-minute live auctions when the markets opened. The exchange auctioned online stocks as though they were antiques or art. Previously, the exchange had only been able to operate on off-hours for a number of reasons, and hadn't been "introduced in a full-form way." Support for the new time slot for the auction came from companies such as Goldman Sachs, J.P. Morgan, Credit Suisse, First Boston and Instinet. The auction's founder and president was Steven Wunsch.^[9]

While the idea behind AZX was ahead of its time in the 1990s and anticipated the more successful electronic communication networks such as Archipelago,^{[citation needed]} it closed in October 2001^[5] primarily due to lack of volume.^[10]

Business model

Restricted to use by large institutional users only,^[10] participants could conduct screen-based trades of equity^[10] and other products through either direct dial-up or internet access. The Arizona Stock Exchange was structured as a proprietary "Single Price" electronic call market. Unique to the Arizona Stock Exchange was the ability to discover the best or "single" price for a stock during the auction based upon supply and demand utilizing both an open book and reserve book of equity orders.^{[citation needed]} Operating under a de minimis exemption, it was not required to be registered or regulated as a stock exchange with the U.S. Securities and Exchange Commission (SEC).^[10]

The general philosophy behind the Arizona Stock Exchange was to let natural buyers and sellers of equities trade directly with one another without intermediation by a broker or dealer. The AZX sought to reduce transaction costs for its participants, remove volatility from the market and determine more robust and fair pricing for equities traded.^{[citation needed]}

References

^ ^a ^b ^c ^d "International Encyclopedia of the Stock Market, Volume 1". Fitzroy Dearborn Publishers. Fitzroy Dearborn Publishers. 1999. ISBN 9781884964350. Retrieved May 19, 2018.
^ ^a ^b ^c ^d ^e ^f ^g "Computerized Stock Trading System Moves to Arizona". Associated Press. Los Angeles, California. December 25, 1991. Retrieved May 19, 2018.
^ Lee, Ruben (1998). "What is an Exchange?: The Automation, Management, and Regulation of Financial Markets". Oxford University Press. ISBN 9780198288404. Retrieved May 19, 2018.
^ Friedman, Daniel (May 4, 2018). "The Double Auction Market: Institutions, Theories, And Evidence". Routledge. ISBN 9780429972164. Retrieved May 19, 2018.
^ ^a ^b ^c ^d "Arizona Stock Exchange". Barron's Educational Series. Retrieved May 19, 2018.
^ Olivia, John. "quantumai". Retrieved 17 Feb 2021.
^ ^a ^b ^c ^d ^e ^f Race, Tim (1991). "The Debate Over Electronic Bidding Reaches Washington". The New York Times. The New York Times, New York City, United States. Retrieved May 19, 2018.
^ ^a ^b ^c Wayne, Leslie (1991). "A Rock Climber's Reach For the Top on Wall St". The New York Times. The New York Times, New York City, United States. Retrieved May 19, 2018.
^ Balzer, Stephanie (April 20, 2001). "Arizona Stock Exchange given new time slot". Phoenix Business Journal. Phoenix, Arizona. Retrieved May 19, 2018.
^ ^a ^b ^c ^d "AZX - Arizona Stock Exchange". Stock Markets. Archived from the original on 2018-05-20.

@@ Line 1: / Line 1: @@
+{{Short description|Former electronic enabled stock exchange}}
 {{Infobox exchange
 |name       = Arizona Stock Exchange
 |alt_name   =
 |logo       =
 |image      =
 |type       = Electronically enabled stock exchange
 |city       = [[Phoenix, Arizona]]
 |country    = [[United States]]
 |coor       =
 |foundation = 1990 as Wunsch Auction Systems in [[New York City]] and [[Minnesota]]
-|closed     =
+|closed     = {{end date and age|2001|10}}
 |owner      =
-|key_people =
+|key_people = Steve Wunsch (founder)
 |currency   =
 |commodity  =
 |listings   =
 |mcap       =
 |volume     =
 |indexes    =
 |homepage   =
 |footnotes  =
 }}
-'''The Arizona Stock Exchange''' (AZX) was an electronically enabled stock exchange for carrying out [[eTrading]] after usual [[stock market]] hours. It closed in October 2001 due to lack of trading volume.
+'''The Arizona Stock Exchange''' (AZX) was an electronically enabled stock exchange for [[extended-hours trading]]. It was founded in 1990{{cn|date=May 2018}} as '''Wunsch Auction Systems'''<ref name=enc/> by R. Steven Wunsch,<ref name=comp-stock/> and moved from [[New York City]] to [[Arizona]] in 1992. It closed in October 2001 due to lack of trading volume.
 ==History==
-===Founding===
+===1990-1991: Founding===
-Founded in 1990{{cn|date=May 2018}} as Wunsch Auction Systems,<ref name=enc/> the headquarters of the company was based in [[New York]]. It was founded by R. Steven Wunsch,<ref name=comp-stock/> a former [[Kidder Peabody]] vice president. The technology trading center was originally based in [[Minnesota]] and built and run by a group of former [[Cray Research]] Supercomputer technologists that included Christopher Moran, Gray Lorig, Kerry Yndestad and Paul Sustman.{{cn|date=May 2018}} Trading commenced on March 30, 1992.<ref name=enc>{{cite news |last= |first= |date= |title=International Encyclopedia of the Stock Market, Volume 1 |url=https://books.google.com/books?id=snJ9TyipILQC&pg=PA1135&lpg=PA1135&dq=%22Arizona+Stock+Exchange%22&source=bl&ots=NHDTEHRyRl&sig=QVene1q0sWQ9hIVUPtFUvYTxs_I&hl=en&sa=X&ved=2ahUKEwjV9vehgZDbAhUrja0KHTxFCUI4FBDoATAIegQIARBQ#v=onepage&q=%22Arizona%20Stock%20Exchange%22&f=false | work=Fitzroy Dearborn Publishers |location= |access-date=}}</ref> The computers were based in Minneapolis, Minnesota, with the office in New York.<ref name=comp-stock/>
+The exchange was founded in 1990<ref name=oxford>{{cite news |last=Lee |first=Ruben |date=1998 |title= What is an Exchange?: The Automation, Management, and Regulation of Financial Markets|url=https://books.google.com/books?id=7ZtVic3xDgAC&q=%22Wunsch+Auction+Systems%22+1990&pg=PA394 | work=Oxford University Press |isbn=9780198288404 |access-date=May 19, 2018}}</ref> as Wunsch Auction Systems<ref name=enc/> by R. Steven Wunsch,<ref name=comp-stock/> formerly of [[Kidder Peabody]].<ref name=kpeabody>{{cite news |last=Friedman |first=Daniel |date=May 4, 2018 |title=The Double Auction Market: Institutions, Theories, And Evidence |url=https://books.google.com/books?id=sUdaDwAAQBAJ&q=%22Wunsch+Auction+Systems%22+1990&pg=RA1-PA19 | work=[[Routledge]] |isbn=9780429972164 |access-date=May 19, 2018}}</ref> The computers were based in [[Minneapolis, Minnesota]], with the headquarters in [[New York City]].<ref name=comp-stock/> The technology trading center in Minnesota was built and run by a group of former [[Cray Research]] Supercomputer technologists that included Christopher Moran, Gray Lorig, Kerry Yndestad and Paul Sustman.{{cn|date=May 2018}} Due to the exchange's low trading volume<ref name=allbiz/> and small size, the [[Securities and Exchange Commission]] exempted Wunsch and the exchange from regulations,<ref name=comp-stock/> and it went unregistered.<ref name=allbiz/> The system was an electronic auction for online trading of [[NYSE]], [[American Stock Exchange|AMEX]], and [[NASDAQ]] stocks for after-hours trades. The system was not intended for individual investors, but rather large trader entities.<ref name=allbiz/>
-Due to the exchange's low trading volume<ref name=allbiz/> and small size, the [[Securities and Exchange Commission]] exempted Wunsch and it from regulations,<ref name=comp-stock/> and it went unregistered.<ref name=allbiz/> It got off to a "slow start" on Wall Street as a computerized stock trading systems that bypassed "traditional" exchange systems. The company was fought by the [[New York Stock Exchange]].<ref name=comp-stock/> The system was not intended for individual investors, but rather large trader entities. AZX was an electronic auction for online trading of [[NYSE]], [[AMEX]], and [[NASDAQ]] stocks for after-hours trades.<ref name=allbiz/>
+It got off to a "slow start" on Wall Street as a computerized stock trading systems that bypassed "traditional" exchange systems.<ref>{{cite news |last1=Olivia |first1=John |title=quantumai |url=https://quantumai.bot/ |access-date=17 Feb 2021}}</ref> The company was fought by the [[New York Stock Exchange]]. As of December 25, 1991, the exchange allowed about 3,100 stocks to be traded during a day, and the system had 56 customers that were institutions. It also had smaller activity than it needed, with Wunsch saying it needed about 24 customers a day placing orders to attract steady business, while it regularly had no more than a dozen customers per day place orders.<ref name=comp-stock/>
+As of 1991, it offered two auctions each day, one taking place a half-hour before the opening of the [[NYSE]], and the other a half-hour after the NYSE closed.<ref name=nyt-tim/> The exchange sought to connect bidders and sellers with set desired trade prices, with investors able to go to the other exchanges, either NYSE or regional, if no match was found.<ref name=nyt-tim/> Over six months in 1991, Wunsch signed about four dozen institutional investors, with the ''New York Times'' describing the project as "the nation's first electronic stock-trading network to be designated a bona fide stock exchange by the Securities and Exchange Commission."<ref name=nyt-tim>{{cite news |last=Race |first=Tim |date=1991 |title=The Debate Over Electronic Bidding Reaches Washington |url=https://www.nytimes.com/1991/10/06/business/the-debate-over-electronic-bidding-reaches-washington.html | work=[[The New York Times]] |location=The New York Times, New York City, United States |access-date=May 19, 2018}}</ref> It was not the first electronic exchange,<ref name=leslie-nyt>{{cite news |last=Wayne |first=Leslie |date=1991 |title=A Rock Climber's Reach For the Top on Wall St. |url=https://www.nytimes.com/1991/01/24/business/a-rock-climber-s-reach-for-the-top-on-wall-st.html | work=[[The New York Times]] |location=The New York Times, New York City, United States |access-date=May 19, 2018}}</ref> but it was the first one set up to directly compete with traditional stock exchanges via price "discovery" in a bidding process.<ref name=nyt-tim/> Traditional exchanges "cried foul" over the new exchange, according to the ''New York Times,'' with regulators being asked to reconsider what "constitutes a stock exchange."<ref name=nyt-tim/> It was worried that although the new exchange had a tiny amount of business, it "theoretically could supplant the Big Board for the large institutional investors." Officials at the NYSE and other exchange argued that the best, easiest trades would be "cherrypicked" by the new exchange.<ref name=nyt-tim/> Also, it "threatens to undermine" the NYSE's role as the price setter for corporate shares, according to the ''New York Times.''<ref name=leslie-nyt/> Later in 1991, 125 institutional investors had signed on.<ref name=leslie-nyt/>
-As of December 25, 1991, the exchange allowed about 3,100 stocks to be traded during a day, and the system had 56 customers that were institutions.<ref name=comp-stock/> It also had smaller activity than it needed, with Wunsch saying it needed about 24 customers a day placing orders to attract steady business, while it regularly had no more than a dozen customers per day place orders.<ref name=comp-stock/>
-===Move to Arizona===
+===1991-1992: Move to Arizona===
-In June 1991, the [[governor of Arizona]] signed legislation for the state to establish a stock exchange. In December 1991, the [[state of Arizona]] approved of Wunsch moving his online electronic auction to [[Phoenix, Arizona]] from [[Wall Street]] and rename it the Arizona Stock Exchange, or AZX.<ref name=comp-stock/> Formerly Wunsch Auction Systems, Inc. it was later operated by AZX, Inc.<ref name=enc/> Arizona received up to $2 million in loans from Arizona, as well as promotion, to serve as incentive for moving to the state. Although Wuncsch asserted that the new exchange was not another [[regional stock exchange|regional stock market]], Arizona officials said they hoped local small and medium companies would gain exposure. It was said the office in Arizona would become active in February 1992.<ref name=comp-stock>{{cite news |last= |first= |date=December 25, 1991 |title=Computerized Stock Trading System Moves to Arizona |url=http://articles.latimes.com/1991-12-25/business/fi-955_1_stock-trading-system | work=[[Associated Press]] |location= |access-date=}}</ref>
+In June 1991, the [[governor of Arizona]] signed legislation for the state to establish a stock exchange. In December 1991, the [[state of Arizona]] approved of Wunsch moving his online electronic auction to [[Phoenix, Arizona]] from [[Wall Street]] and rename it the Arizona Stock Exchange, or AZX.<ref name=comp-stock/> Formerly Wunsch Auction Systems, Inc. it was later operated by AZX, Inc.<ref name=enc/> Arizona received up to $2 million in loans from Arizona, as well as promotion, to serve as incentive for moving to the state. Although Wuncsch asserted that the new exchange was not another [[regional stock exchange|regional stock market]], Arizona officials said they hoped local small and medium companies would gain exposure. It was said the office in Arizona would become active in February 1992.<ref name=comp-stock>{{cite news |date=December 25, 1991 |title=Computerized Stock Trading System Moves to Arizona |url=https://www.latimes.com/archives/la-xpm-1991-12-25-fi-955-story.html | work=[[Associated Press]] |location=[[Los Angeles, California]] |access-date=May 19, 2018}}</ref> Trading commenced on March 30, 1992.<ref name=enc>{{cite news |date=1999 |title=International Encyclopedia of the Stock Market, Volume 1 |url=https://books.google.com/books?id=snJ9TyipILQC&q=%22Arizona+Stock+Exchange%22&pg=PA1135 | work=Fitzroy Dearborn Publishers |publisher= Fitzroy Dearborn Publishers|isbn= 9781884964350|access-date=May 19, 2018}}</ref>
-===Auctions and closure===
+===1993-2001: Auctions and closure===
-In April 2001, the SEC granted the Arizona Stock Exchange permission to hold one of its 30-minute live auctions when the markets opened. The exchange auctioned online stocks as though they were antiques or art.<ref name=phoenix>{{cite news |last=Balzer |first=Stephanie |date=April 20, 2001 |title=Arizona Stock Exchange given new time slot  |url=https://www.bizjournals.com/phoenix/stories/2001/04/16/daily76.html | work=[[Phoenix Business Journal]] |location=[[Phoenix, Arizona]] |access-date=May 19, 2018}}</ref> Previously, the exchange had only been able to operate on off-hours for a number of reasons, and hadn't been "introduced in a full-form way."<ref name=phoenix/> Support for the new time slot for the auction came from companies such as [[Goldman Sachs]], [[J.P. Morgan]], [[Credit Suisse]], [[First Boston]] and [[Instinet]].<ref name=phoenix/> The auction's founder and president was Steven Wunsch.<ref name=phoenix/>
+In April 2001, the SEC granted the Arizona Stock Exchange permission to hold one of its 30-minute live auctions when the markets opened. The exchange auctioned online stocks as though they were antiques or art. Previously, the exchange had only been able to operate on off-hours for a number of reasons, and hadn't been "introduced in a full-form way." Support for the new time slot for the auction came from companies such as [[Goldman Sachs]], [[J.P. Morgan]], [[Credit Suisse]], [[First Boston]] and [[Instinet]]. The auction's founder and president was Steven Wunsch.<ref name=phoenix>{{cite news |last=Balzer |first=Stephanie |date=April 20, 2001 |title=Arizona Stock Exchange given new time slot  |url=https://www.bizjournals.com/phoenix/stories/2001/04/16/daily76.html | work=[[Phoenix Business Journal]] |location=[[Phoenix, Arizona]] |access-date=May 19, 2018}}</ref>
-While the idea behind AZX was ahead of its time in the 1990s and anticipated the more successful [[electronic communication network]]s such as [[NYSE Arca|Archipelago]],{{cn|date=May 2018}} it closed in October 2001<ref name=allbiz>{{cite news |last= |first= |date= |title=Arizona Stock Exchange |url=https://www.allbusiness.com/barrons_dictionary/dictionary-arizona-stock-exchange-azx-4948824-1.html | work=Barron's Educational Series |location= |access-date=May 19, 2018}}</ref> due to lack of volume.{{cn|date=May 2018}}
+While the idea behind AZX was ahead of its time in the 1990s and anticipated the more successful [[electronic communication network]]s such as [[NYSE Arca|Archipelago]],{{cn|date=May 2018}} it closed in October 2001<ref name=allbiz>{{cite news |title=Arizona Stock Exchange |url=https://www.allbusiness.com/barrons_dictionary/dictionary-arizona-stock-exchange-azx-4948824-1.html | work=Barron's Educational Series |access-date=May 19, 2018}}</ref> primarily due to lack of volume.<ref name=azx-closed>{{cite news |title=AZX - Arizona Stock Exchange |url=http://www.stockmarkets.com/exchanges/north-america/arizona-stock-exchange/ |work=Stock Markets |archive-url=https://web.archive.org/web/20180520054918/http://www.stockmarkets.com/exchanges/north-america/arizona-stock-exchange/ |archive-date=2018-05-20 |url-status=dead }}</ref>
 ==Business model==
-Restricted to use by large institutional users only, participants could conduct screen based trades of equity and other products through either direct dial-up or internet access. The Arizona Stock Exchange was structured as a proprietary "Single Price" electronic call market.  Unique to the Arizona Stock Exchange was the ability to discover the best or "single" price for a stock during the auction based upon supply and demand utilizing both an open book and reserve book of equity orders.  Operating under a ''[[de minimis]]'' exemption, it was not required to be registered or regulated as a stock exchange with the [[U.S. Securities and Exchange Commission]] (SEC).{{cn|date=May 2018}}
+Restricted to use by large institutional users only,<ref name=azx-closed/> participants could conduct screen-based trades of equity<ref name=azx-closed/> and other products through either direct dial-up or internet access. The Arizona Stock Exchange was structured as a proprietary "Single Price" electronic call market.  Unique to the Arizona Stock Exchange was the ability to discover the best or "single" price for a stock during the auction based upon supply and demand utilizing both an open book and reserve book of equity orders.{{cn|date=May 2018}} Operating under a ''[[de minimis]]'' exemption, it was not required to be registered or regulated as a stock exchange with the [[U.S. Securities and Exchange Commission]] (SEC).<ref name=azx-closed/>
 The general philosophy behind the Arizona Stock Exchange was to let natural buyers and sellers of equities trade directly with one another without intermediation by a broker or dealer.  The AZX sought to reduce transaction costs for its participants, remove volatility from the market and determine more robust and fair pricing for equities traded.{{cn|date=May 2018}}
@@ Line 51: / Line 52: @@
 {{reflist}}
-==External links==
+==Further reading==
+* {{cite news |author=Stephen Butkow |title=Original Edition |url=https://books.google.com/books?id=ClZdNwAACAAJ | work=An Examination of the Arizona Stock Exchange |date=1998 }}
-* [https://web.archive.org/web/20060804205334/http://www.stevewunsch.com/ Steve Wunsch]
 [[Category:Former stock exchanges in the United States]]
 [[Category:Defunct companies based in Arizona]]
-{{Arizona-stub}}
-{{Stockexchange-stub}}