We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Technology

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is Instinet?

By Deanira Bong
Updated: Feb 25, 2024

Instinet is an electronic communication network that facilitates trading by allowing traders and investors to display bid and offer quotes for stocks and conduct trading. It also lets them use brokers' services to conduct securities transactions. Using electronic trading products, Instinet also offers brokerage services such as sales trading, transaction analysis, commission management and access to research material provided by third parties.

Instinet's clients include mutual funds, insurance companies, pension funds and other institutional investors. The network allows investors that want to buy or sell securities to advertise trading interest on its system, then lets them trade directly and anonymously with one another. This helps institutional investors avoid paying brokerage commissions, lowering their overall execution costs. Investors can also choose to use brokers to place orders on securities on all U.S. exchanges and some non-U.S. exchanges, including those without automated trading systems. Unlike traditional brokerage houses, Instinet does not trade stock for its own account and is no competition for its clients.

The birth of Institutional Networks in 1969 marked the first time that U.S. institutions used an automated electronic system to conduct direct trading with one another. It also created the "green screen" — the first U.S. quote montage that contained stocks listed on the New York Stock Exchange (NYSE). Institutional Networks also created what is probably the first direct market access system that allowed institutional investors to directly access U.S. exchanges. After changing its name to Instinet in 1985, the company continued to make drastic improvements to the way people trade. For example, it launched the first U.S. point-in-time cross that conducted a nightly after-hours match at the market closing price, and it set up one of the first modern execution management systems for equity trading.

The company has changed ownership a few times over the years. Reuters Holdings bought Instinet in 1987 and offered 15 percent of its shares on NASDAQ under the symbol "INET" in 2001. Silver Lake Partners, a private equity group, bought Instinet in 2005, and Nomura Holdings bought it in 2007. Instinet has also bought other companies, such as TORC Financial and ECN Island, which it then sold to NASDAQ.

Instinet was headquartered in New York in 2010 with subsidiaries in several locations in the U.S., Canada, Europe, Japan, Hong Kong, Singapore and Australia. It regularly ranks among the world's best brokerages, receiving nine awards in 2009 alone. It received awards for technology, brokerage, execution quality and commission management from financial media outlets and financial research associations.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
Share
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.