A “wire house” (or “wirehouse") is a brokerage house that has a communication network; originally, a “wire house” meant a brokerage house with a telegraph line or a telephone line. Later, a “wire house” meant a big firm that had electronic (and often wireless) communications. The term “wire house” is still used today, even though technology has made the term dated.
“Wire house” is cited in print from at least 1894. According to a 1922 source (below), the first “wire house” used a telegraph wire from Wall Street to 23rd Street in Manhattan in 1873.
A company whose different branches are linked by a communications system enabling the sharing of financial information, research, and prices.
Banks are a good example of this, the different branches are connected to allow a customer’s information to be used at any branch of that bank.
–noun Stock Exchange. a brokerage firm with branch offices connected with their main office by a private system of telephone, telegraph, and teletype wires.
wire house Finance Definition
A brokerage house whose offices are linked by a communication network to enable prices, information, orders and research to be distributed to all the offices. The term is relatively out of date now, but before computers became widely used, only the largest firms had access to the state-of-the-art equipment that interconnected their offices. As used today, wire house generally means one of the biggest brokerage firms.
A firm whose branch offices are linked by a communications system enabling the sharing of financial information, research, and prices.
national or international brokerage firm whose branch offices are linked by a communications system that permits the rapid dissemination of prices, information, and research relating to financial markets and individual securities. Although smaller retail and regional brokers currently have access to similar data, the designation of a firm as a wire house dates back to the time when only the largest organizations had access to high-speed communications. Therefore, wire house still is used to refer to the biggest brokerage houses.
What is a Wire House?
When you have a bank account, you can typically use any branch of your bank to make deposits, withdrawals or otherwise. The reason you’re able to do this is because all of the branches belonging to your bank, through computer communication, are essentially “wired” together and have access to the same information though high-speed communication means. This can also be called a wire house.
In the example above, wire house doesn’t refer to the branch itself, but to the company (house), which organizes its many locations by providing them with the same level of access to information. Those old enough to remember the pre-computer era of banking realize the term is still a relatively new one. Prior to the ability to communicate via computer from bank to bank, no company could be called a wire house. If you wanted instant access to your funds, you’d visit the bank that was your home branch, since it had direct information about your bank balance.
When computers were first developed, they were massive machines not intended for home use. High-speed connections between different parts of a company or different branches of the same bank were common in businesses long before they were affordable for use at home. Only the biggest companies could afford the expense of being able to provide communication from office to office, and frequently these companies were brokerage firms. It thus became common to refer to a large brokerage firm as a wire house, as they were wired together so that the same information was available to every aspect of the firm.
The name stuck, even though we now see examples of “wired” companies in a variety of settings and it’s as common as air. You can visit or call a stockbroker at any location and receive current and the latest information on prices of stocks and drops in the market. You can even direct a broker to purchase or sell stock, which can often be done immediately, and you’re able to get this information online too.
(Oxford English Dictionary)
wire house U.S., a brokerage firm having branch offices connected to its main office by private telephone and telegraph wires
1904 N.Y. Evening Post 18 June (Financial Sect.) 1/7 The so-called ‘*wire house’..is a product of the boom times.
1966 Economist 25 June 1436/1 It [sc. the New York Stock Exchange] has been firing salvos..about possibly setting up an auxiliary trading floor somewhere in New Jersey… Several larger nation-wide ‘wire’ houses have already said that they are considering some such plans to relocate.
1982 Times 27 July 15/4 United States banks..in the past have left financial futures very much to the brokers and major ‘wire houses’ such as Bache or Hutton.
10 February 1894, New York (NY) Times, “Chicago Was Afraid of Wall Street,” pg. 2:
All the private-wire houses were active on the selling side, those most talked of in connection with the Wall Street bull interest being the most active.
28 October 1895, Wall Street Daily News, pg. 2:
Chicago is to have another New York Stock Exchange seat and another private wire house.
2 March 1900, New-York (NY) Daily Tribune, pg. 4, col. 3:
Few of the wire houses had any steady communication with the West yesterday, and the usual gossip relating to market affairs was naturally much restricted.
25 August 1901, New York (NY) Times, “Market Movement,” pg. 14:
Chicago wire houses were conspicuous purchasers, much of their buying being the covering of short contracts.
Smith’s Financial Dictionary
By Howard Irving Smith
New York, NY: Moody’s Magazine
Private-wire house. A brokerage concern which has private telegraph wires to its branch offices or to the offices of correspondents at other points. The telephone has superseded the telegraph to some extent; private telephone wires are hired the same as private telegraph wires.
The Work of the Stock Exchange
By James Edward Meeker
New York, NY: The Ronald Press Company
But with the steady westward thrust of population and wealth into our southern and western states, the demand for stock market facilities has led to a similar extension of the Stock Exchange system into all parts of the nation, through the rise of the “wire house” type of Stock Exchange commission firm. The first sign of this coming development was shown in 1873, when a prominent Wall Street firm established a private telegraph line to its up-town office at 23rd Street—a great convenience at a time before the elevated railroador telephone system, when it took over an hour to communicate between the two offices. The obvious advantages of such (Pg. 325—ed.) speedy means of communication soon bore more extensive results. In 1879 private wires were obtained by various Wall Street firms to their offices in the neighboring centers of Boston and Philadelphia.
Dictionary of Business and Economics
By Christine Ammer and Dean S. Ammer
New York, NY: Simon and Schuster
wire house A member firm o a STOCK EXCHANGE that maintains a communications network linking its own branch offices, the offices of correspondent firms, or a combination of such offices, both with one another and with the exchange.
Dictionary of Business Terms
By Jack P. Friedman
Published by Barron’s
WIRE HOUSE national or international brokerage firm whose branch offices are linked by a communications system that permits the rapid dissemination of prices, information, and research relating to financial markets and individual securities.
New York City • Banking/Finance/Insurance • (1) Comments • Tuesday, November 11, 2008 • Permalink
The “wire house” has indeed come a long long way since it was used in 1873.
This is indeed a great resource. I admire the work you put in these pages.
More power to you Barry!