• Feb
  • 26
  • 2007
  • 8:51 AM

Q&A: When/where do orders route out?

By: Ray Pellecchia
File Under: NYSE, NYSE

A reader on the sell side asks:

When an order is sent to NYSE floor through SIAC (limit or market) under what circumstances will it be outbounded to another market center, and which market center ?
-- Sal Messina

Sal -- Orders sent to NYSE are routed to another market only when another market posts a better price at the top of its book. Which market? It can be any of the other exchanges that make markets in NYSE-listed issues.

If you prefer not to have your order route out, you can use an Intermarket Sweep Order or a Reg. NMS Immediate or Cancel order, described here. This week, we will finish rolling out these orders for all NYSE-listed issues that trade in 100-share units.

Hope that helps, Sal. Thanks for writing!

Also, on the trivia front, born On This Day: the late, great Johnny Cash, born in 1932; and Mitch Ryder, who turns 62 today.

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Comments

So if arca has the top two price levels on level 2, will the order only route to the top price level on arca for the size it is displaying and the remaining be filled on nyse? Will it route to two market centers at different price levels?

Let's say this is the bid on level two:
exch pric size
arca 5.35 200
inet 5.34 300
arca 5.34 300
arca 5.33 500
nyse 5.32 500

How would a market of 10000 be handled?

Further, when it slow mode, will the specialist still take top of book?

by Jon on February 26, 2007 12:10 PM

Hi Ray,
Are there cross-continental intellectual property issues related to the Arca routing system that will be part of Hybrid as it related to the Euronext merger?

Does Hybrid include any patents? If so, will these carry in Europe?

Thanks in advance. And good luck with completing the rollout.

by bk on February 26, 2007 2:55 PM

Jon --

In your example, if the order was sent to NYSE, we would route to Arca for the 200 at 5.35, then to Inet for the 300 at 5.34. Then the balance would come back to NYSE, because we are routing only to top of book in other markets.

Same thing applies if NYSE is in "slow" mode -- we would take only top of book in the other markets.

Hope that answers it. Thanks for writing!

by Ray Pellecchia on March 5, 2007 2:06 PM

BK --

Sorry to be slow in getting back to you.

Our rule proposals for the NYSE Hybrid Market were filed for patents in both the U.S. and Europe.

Beyond that, I can't discuss anything in the context of the merger because the combination is pending.

Hope that's of some help. Thanks for writing, and for the good wishes on the rollout!

by Ray Pellecchia on March 6, 2007 8:13 AM

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