Q&A: Will specialist 'see' NYSE Direct+ orders?

By: Ray Pellecchia

File Under: NYSE

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A trading-cost analysis vendor writes:

When Phase 3 is completed, I understand that NYSE Direct+ will have no limitations as it does now.

My question is will the orders placed on Direct+ be with secrecy or will the specialist be able to see the orders on the display book?

In other words if a block order is placed for a buy of 30,000 shares and there is a match on the other side, will the order be filled instantaneously?

Will Direct+ act in the same way as Liquidnet? Thank you.

When Phase III is complete, the current restrictions on NYSE Direct+ order size, frequency and type will indeed be removed. Yes, your 30,000-share buy order would be executed automatically without intervention of a "physical" specialist, if there is a match on the other side.

The specialist does have the ability to interact algorithmically with the order to provide price improvement, and depending upon the quote at the time can do so for the minimum amount called for by the price-improvement formula. For that formula -- and other requirements the specialist must meet to provide algorithmic price improvement -- see this earlier post.

PS -- Sorry for not e-mailing you back this answer as well, but you gave an incomplete e-mail address when you sent this question via our "Contact" button.