Q&A: Intermarketing

By: Ray Pellecchia

File Under: NYSE, NYSE

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A reader writes:

Excellent summary of Phase 3 rollouts on the site. Keep up the good posting.

Question 1: Would Limit NX still be active if NYS is not the best price?

Question 2: ECN now would be able to switch between fast and slow market?

Question 3: When sweeping, NYSE would route order to other centers with a better price.
However, NYSE is not obliged to do so and can just wait until its book has equal or better prices. Am I right?

-- Ron

Thanks for the questions, Ron. Taking them one at a time:

Would Limit NX still be active if NYS is not the best price?
Our not having the best price does not turn off automatic execution, if that's what you mean. If NYSE does not have the best quote, your marketable limit order would be automatically routed to another market that does.

ECN now would be able to switch between fast and slow market?
Sorry, I can't speak for how ECNs intend to handle these situations. I’ve got my hands full just writing about NYSE; let them get their own blog.

When sweeping, NYSE would route order to other centers with a better price. However, NYSE is not obliged to do so and can just wait until its book has equal or better prices. Am I right?
Actually, we are obliged to automatically match or better the price, or else route to better prices; Reg. NMS requires us to do so. If you want your order/sweep to occur all on NYSE, send us an Intermarket Sweep Order (in compliance with Reg. NMS requirements regarding the use of ISO orders), which, despite its name, will not be routed from the market to which it is sent. In addition, if you send a Reg. NMS-compliant Immediate or Cancel (IOC) order, it will not be routed.

BTW, everyone, you can click on the People get ready post for the summary of Phase III changes that Ron referenced.

And now for a little bit of history trivia courtesy of nyse.com:

Today in NYSE History
28 Sep 1938 The Board of Governors elected three public representatives to the board, bringing its membership to its full complement of 32.

Wow, 32 members. I guess that's why our Board Room is so big.

How far we've come. Today, our 11-member board is all independent except for one representative of management, John Thain.

Tags: [New York Stock Exchange, Hybrid Market, NYSE, NYX, John Thain