A great New Year's resolution--NYSE Arca Options!

By: Amy Farnstrom

File Under: Options

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Hello Options People!

It has been an exciting year for us at NYSE Arca Options. From January through November of 2007, we have seen our market share in the penny pilot names increase by nearly 10%, our monthly average volume reaching the 2 million contracts a day range in November--and upwards of 75% of those contracts executed on our blazingly fast electronic options platform!

NYSE Arca Options’ market makers and all of our customers have helped drive market share to 14 .6% for equity options (making us the number three exchange in November 2007) and from 8% (pre-pilot) to 17.6% in Penny Pilot names. We are the fastest growing US equity options exchange with a 60% growth rate in 2007, compared to the industry average of 30%. Our market share in individual penny pilot names continues to accelerate as well, with more than 20% of options volume in the QQQQs coming to NYSE Arca. In anticipation of increased industry volumes and our own growing market share, we've increased our throughput this year as well, positioned to handle up to 60,000 orders per second , and our quote capacity is simply enormous--we are well ahead of the curve with 1 million--let's say that together--1 MILLION quotes per second.

Additionally, here's a good snapshot of how effective our quote mitigation plan has proven to be: from May to September 2007 we saved 19.5 million quotes, i.e. the equivalent of 15% of NYSE Arca quote traffic, with over 34,000 series mitigated every day.

2007 also saw the addition 10 new Order Flow Providers and 11 new Market Makers to the NYSE Arca Options community. Our post/take pricing model in the penny names has made quoting on NYSE Arca Options a very attractive proposition for market making firms, and the added liquidity and tighter spreads this robust competition from quoters has put us at the NBBO more often than any other exchange, attracting order flow providers to the national best price--right here on NYSE Arca!

So that's a look back, which is a satisfying thing to do at the end of a year like 2007, but more exciting is what lies ahead. What we can look forward to in 2008 includes another expansion of the penny pilot in March, bringing approximately 60% of all industry volume into the pilot. Here at NYSE Arca we are ready to rock! Our increased throughput and capacity planning in 2007 makes us well placed to continue to offer all the speed and reliability for which we are justly noted in the industry. Our motto is "YES PENNIES! Flat, open and transparent!!!"

Aside from the expansion of the penny pilot, we've been busy cooking up a complex order book that will launch late Q1 of 2008, bringing you the ability to execute orders with up to 5 legs, and that includes an equity leg. Because of the liquidity available on our options and our equities platforms, we will not only offer complex to complex order transactions but also legging into our liquidity pools for riskless option/equity transactions along with risk free option only complex trades. This is good stuff--watch this space for more details in the next month or so, when I will take you under the hood and discuss the particulars of how this new functionality is going to work.

We've got a lot more up our sleeve for 2008, and it promises to be another stellar year for our quoting and order flow community here at NYSE Arca Options, so keep checking back! If you're on board, huzzah! If you are thinking of joining the fun, now is the time! A great New Year's Resolution--NYSE Arca Options!!!!