• Jul
  • 09
  • 2008
  • 10:09 AM

Complex Order Book Coming in August to NYSE Arca Options

By: Amy Farnstrom
File Under: NYSE Arca, Options

Hello my fine options friends! I am writing you to give you the latest skinny on our Complex Order Book, coming to your favorite Options Trading Platform the first part of August 2008.

Everything you love about NYSE Arca Options will be in place for complex order trading—speed, transparency, throughput—with the addition of extremely low-latency trading between our very liquid equity and options platforms (it is SO FAST!), which will supercharge your execution opportunities for option/equity trades -- and you’ll enjoy the usual lightning-fast order handling for options-only complex orders that you know and love as a participant in our single- leg markets.

Here’s the scoop:

• You can send up to 5 legs in any complex order, which means up to 5 option legs or up to 4 option legs and 1 equity leg.

• NYSE Arca offers riskless execution for options-only and options with stock complex orders, by matching complex orders within the complex order book OR by interacting with the liquid simple markets on both the options and equities platforms.

• Complex orders can be priced in penny increments.

• Marketable complex orders will trade immediately, with no auction or delay in processing.

• You can send in complex orders via FIX or ArcaDirect (specs for both are located on the website).

• Complex order will always receive price improvement, if available from resting complex orders or the simple market legs.

• You can send delta neutral as well as buy write orders.

• A new ArcaBook subscription will be available for the complex order book.
o Top of Book Messages
o New Instrument Messages

• In order to identify and organize complex instruments and orders, NYSE Arca will disseminate Complex FAST symbols via ArcaBook.
o FAST Symbol will be created for the order immediately upon receipt from FIX if the instrument does not already exist.
o An ArcaBook message will be sent that contains the leg definitions of the complex order along with the FAST symbol.
o Once defined, any further activity in the instrument will be broadcast using the FAST symbol only.
o These FAST symbols will be available to ArcaBook users whenever they subscribe, not only at start of day.

If you have any questions regarding our upcoming complex order book, feel free to drop me a line. I’ll talk your ear off if you give me the chance! Vive la Complex!

Comments

All due respect...

Ive wondered for the past two years how anyone looking at the way stocks have traded under the hybrid system and thought it was a good idea. Clearly many of you have advanced degrees, experience with markets, and dare i say TRADE! Which is why it is so utterly shocking to me how completely off the reservation the decision makers at the NYSE must be...!

My major question...DO YOU GUYS WATCH THE WAY STOCKS TRADE???? and if so, please tell me what you think. please tell me you are 'ok' with 2 and 3 hundred share orders moving a market 1-2 points... please tell me you are ok with the LRP at many points during the day being the inside market, please tell me you are ok with slippage and backing away, (if the answer is "yes" or 'OK', i promise ill shut up and wont post anymore understanding we have differing opinions on what a stock market is)and please, if anyone out there thinks these were positive changes for overall market quality...list your points here. I am a rational human being and would love to hear some postives that maybe i just havent seen for 2 years...

And 1 more request, i sit patiently waiting for an answer better than "hang on guys, its gonna get good, thanks for your orders, more changes to come shortly"

by jt on July 9, 2008 11:09 AM

I know for a fact MANY of the guys who work at the exchange basically agree with us JT. I really believe at this point the Top brass at the exchange just cant or wont admit the past mistakes with the Hybrid. What is worse though? to keep going on with a flawed product or just get on with some SERIOUS changes already. Get the specialists involved with adding liquidity, price improvement, and stabilize your market. Enough with the crazy swings on 1, 2 hundred share prints that actually hurt your business. This has been going on for far too long already and is chipping away at the NYSE market share. Thanks Ray.

by tony dey on July 9, 2008 5:00 PM

One more problem that has been created due to hybrid and the amount of orders and cancels that these black boxes are sending out, have created a information overload, that trading firms are having trouble keeping their technology up to par. The nyse loves to say that they are handling all this data with no problem, but what about the people who actually are tading this market.
Also, I'm not talking about small firms either.

by josh on July 10, 2008 11:09 AM

Josh -- Respectfully, the industry's move toward the high-frequency messaging you describe is not specific to NYSE. I think our allowing more automated trading simply allowed firms to do here what they were already doing everywhere else, bypassing us. If we didn't accommodate it, I think we would no longer be competitive.

To me, the key is, in this environment, how do you adapt, how do you re-aggregate liquidity that is now too fragmented and hard to find, how do you enable your market participants to deal with the changes and add value to the process. That's what we're after.

by Ray Pellecchia on July 10, 2008 11:25 AM

Well, i really think one of my ideas would have a very positive effect on the markets. Put in place some sort of fee or fine for the abuse of order canceling. If a computer program only allows it self to be execute once for every 50 to 100 cancels there is something wrong.

by josh on July 10, 2008 1:35 PM

josh, that fee already exists. they charge you 1cent for every cancel if your cancels count >= 90% of your total orders. I think it's been around for almost a year now... see comment here, I couldn't find the press release:

http://exchanges.nyse.com/archives/2008/01/bugs_bunny.php

"For that reason, we charge this fee (1 cent per message) on only cancelled orders in excess of 90 percent of the sender's total system orders. "

by anotherjosh on July 15, 2008 6:25 PM

Ray, Maybe someone from the NYSE can explain how rule 123c is being broken everyday. As per exchange rules you are NOT supposed to be able to add to a posted imbalance just off-set it after 3:40 - 3:50. This has been happening since the roll-out on july 1st. Thanks.

by tony dey on July 21, 2008 4:48 PM

Hi
Nice site!

G'night

by PlantibeRaibe on October 1, 2008 10:29 AM

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