expected either to match that price or route the trade to that market. While the ITS does much to unify markets, it has some important shortcomings. First, it does not provide for automatic execution in the market with the best price. The trade must be directed there by a market participant, who might find it inconvenient (or unprofitable) to do so. Moreover, some feel that the ITS is too slow to integrate prices off the NYSE. A logical extension of the ITS as a means to integrate securities markets would be the establishment of a central limit order book. Such an electronic "book" would contain all or- ders conditional on both prices and dates. All markets would be linked and all traders could compete for all orders. While market integration seems like an desirable goal, the recent growth of ECNs has led to some concern that markets are in fact becoming more fragmented. This is because participants in one ECN do not necessarily know what prices are being quoted on other net- works. ECNs do display their best-priced offers on the Nasdaq system, but other limit or- ders are not available. Only stock exchanges may participate in the Intermarket Trading System, which means that most ECNs are excluded. Moreover, during the after-hours trad- ing enabled by ECNs, trades take place on these private networks while other, larger mar- kets are closed and current prices for securities are harder to assess. Arthur Levitt, the chairman of the Securities and Exchange Commission, recently renewed the call for a uni- fied central limit order book connecting all trading venues. Moreover, in the wake of grow- ing concern about market fragmentation, big Wall Street brokerage houses, in particular Goldman Sachs, Merrill Lynch, and Morgan Stanley Dean Witter, have called for an elec- tronically driven central limit order book. If the SEC and the industry make this a priority, it is possible that market integration may yet be achieved.       3.3 TRADING ON EXCHANGES   Most of the material in this section applies to all securities traded on exchanges. Some of it, however, applies just to stocks, and in such cases we use the term stocks or shares.     The Participants   When an investor instructs a broker to buy or sell securities, a number of players must act to consummate the trade. We start our discussion of the mechanics of exchange trading with a brief description of the potential parties to a trade. The investor places an order with a broker. The brokerage firm owning a seat on the ex- change contacts its commission broker, who is on the floor of the exchange, to execute the I. Introduction 3. How Securities Are Traded The McGraw−Hill Companies, 2001