What Is a Board Broker?

What Is a Board Broker?

3 Min.

Board brokers fulfill orders and make markets for commodities or options exchanges. They were once widely used by CBOE but have become less common as automated trading platforms have taken over their functions, such as those used by Nasdaq.


Board brokers play a prominent role in commodity and options exchanges. Tasked with the crucial duty of aligning and effectuating orders, these professionals also extend a spectrum of market-making services. Comparable to the specialists engaged by stock exchanges like the New York Stock Exchange (NYSE), board brokers uphold a parallel function in their domain.

How Do Board Brokers Work?

Functioning as members of commodities or options exchanges, board brokers adopt a unique role that amalgamates facets of market-making and stock brokerage services. Fundamentally, their duty entails fostering an organized trading milieu within the exchanges they serve.

An eminent instance of board brokers was evident within the operations of the CBOE. Nevertheless, the CBOE's "Board Broker System" eventually yielded to a fully automated electronic trading system.

Ordinarily, board brokers are assigned specific commodities or options under their purview. Fellow members and participants in the market depend on these board brokers to align their orders and sustain ample liquidity for successful trade execution.

In scenarios where the demand for a given security eclipses its supply, board brokers are anticipated to tap into their own inventory for selling, thus harmonizing supply and demand. Conversely, should supply exceed demand, these brokers may procure the concerned security to infuse liquidity into that market segment.

Additionally, board brokers extend services like furnishing price quotations for securities within their portfolio, especially during opening and closing sessions or instances of abnormally low trading activity.

Board Broker Example

Michaela, an adept board broker affiliated with a prominent commodities exchange, assumes the pivotal task of supervising trade implementation and market fluidity within the domain of oil and gas futures. In the scope of her responsibilities, Michaela maintains an active correspondence with market participants seeking to engage in substantial securities transactions within these commodity clusters. By directly engaging with brokers representing both ends of these transactions, she adeptly facilitates optimal execution outcomes for the orders placed by market participants.

Beyond her role in executing orders, Michaela further assumes the mantle of a market maker. When a particular commodity experiences a noteworthy scarcity of liquidity, she sporadically intervenes to rectify the equilibrium between supply and demand. In parallel, she contributes to orderly trading by furnishing consistent price quotations, a practice especially pertinent to thinly traded securities where the prevailing market price might be elusive.


Board brokers have historically played a vital role in fulfilling orders and facilitating market activities in commodities and options exchanges. The prevalence of their position, notably exemplified by the CBOE, has declined as automated trading platforms like Nasdaq have progressively assumed their functions.

Operating as intermediaries, board brokers ensure order alignment and maintain market stability, comparable to specialists in stock exchanges. This role is evident in Michaela's case, where she oversees trade execution and market fluidity in oil and gas futures. As trading landscapes evolve, the legacy of board brokers underscores their expertise in market-making and order execution, highlighting their enduring significance in the realm of trading exchanges.


Chicago Board Options Exchange (CBOE)
Board Broker
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