• Oct
  • 05
  • 2007
  • 3:20 PM

'NYSE Seeks Faster Trading by Opening Some Stocks Automatically'

By: Ray Pellecchia
File Under: NYSE

NYSE Seeks Faster Trading by Opening Some Stocks Automatically (Bloomberg) -- Excerpt:

The New York Stock Exchange, the world's largest equity market, plans to automatically open some shares for trading while relying on floor specialists to handle more actively traded issues.

"Our goal is to be open earlier for all stocks, and the first step in that is to open a subset of stocks automatically on a quote,'' NYSE Euronext Executive Vice President Larry Leibowitz said in an interview today.

Specialists on the floor of the NYSE must manually open trading in their assigned stocks. The new procedure would allow the exchange to start trading on many stocks closer to the official 9:30 a.m. open while allowing specialists to concentrate on issues where there is an imbalance between buy and sell orders, Leibowitz said.

We'll begin rolling this out to a small group of stocks next week and go from there, Larry told the audience at a Securities Traders Association in Boca Raton, Fla. today.

This makes sense. Let the machines do the machine work and let the specialists tackle the tougher ones. Get the customers a faster opening overall.

Boca, eh? How's the weather there, anyone? Kinda feels like Boca here today: 85 and a little muggy. Boca always had a nice breeze coming off the bay, though, whereas neither river (Hudson nor East) seem to stir the air in our little canyon of finance at 11 Wall St. Reading of Boca reminds me of my time as a junior media-relations guy running around the Pink Palace (the Boca Raton Resort & Club), covering some executive's speech and wiping my brow with a sheaf of speaker's notes, plane schedules and interview requests jotted on hotel napkins. Those were the days!

But I digress. As I tend to do on a Friday afternoon. As well as on a Friday morning. And when I think about it, pretty much 24/7.

See, there I go again.

On to your daily dose of trivia. And give my regards to the Pink Palace. Wish I were there.

Today in NYSE History
05 Oct. 1847 -- The NYSE announced that any "regularly incorporated company," having its transfer books available for inspection in New York, could be traded at the Exchange - an early listing requirement.

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Comments

IMO, You are laying the groundwork for your own demise. Bad idea.

by tony dey on October 5, 2007 7:18 PM

Ray: Good start, but obviously much more to do to improve NYSE opens and closes. Any timing on when you'll have indicating prices and imbalance information in real-time? Thanks. JS

by Jamie Selway on October 12, 2007 4:30 PM

Tony -- As always, I appreciate your viewpoint. I respectfully disagree on this one.

The key to avoiding our own demise is positioning people to be able to use their judgment and interaction when they can be of value, and the only way to do that at the opening is to free up specialists from rote tasks. Automating some of the openings lets the computers do the grunt work and allows specialists to do the value-added.

I wish I had an API to do the grunt part of posting links to the blog, which involves rather tedious cutting and pasting, and inserting bits of code. That would save me a few minutes I could put toward researching or writing something useful. Or taking a quick nap.

I think this initiative is proving to be a help to the floor -- as well as the customer -- not a hindrance. If anyone from the floor wants to weigh in on that, the comment box below is all yours. Thanks for writing, Tony.

Jamie -- My colleagues tell me that pre-opening indications are expected to go live in the November-December time frame. Will pass along a more specific date as soon as we get through final quality assurance.

I don't have as clear a picture on real-time imbalances, but making these available is a priority for us, and I'll pass along any updates as I get them.

Two other updates that might be of interest along these lines:
1) By the end of October, all depth-of-market S-Quotes from the specialist -- previously not published to NYSE OpenBook -- will be reflected in OpenBook -- and
2) Also by the end of this month, all listed securities will be capable of being opened automatically with use of the specialists' API if they can open on a quote, as discussed above. And as we've said, specialists will continue to be able to "physically" handle the more challenging openings, while leaving the more routine ones to the machines.

Thanks for writing, Jamie! Again, will keep you posted as these things progress.

by Ray Pellecchia on October 22, 2007 6:53 PM

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