From Todd Wilemon::
With two months left in 2009, it is amazing what has taken place. Under the leadership of Ed Boyle, Senior Vice President of US Options, and with the support of the entire organization we have been setting goals and ruthlessly executing our plan to become the places to trade options both electronically and via open outcry.
From Todd Wilemon: A Tracking Order is a limit order that is not displayed and only activates to trade when certain specific conditions are met. Tracking Orders allow you to always trade on the NBBO or National Best Bid or Offer while also giving you the ability to choose the size of orders you will interact with and at a price range of your choosing.
“This is an example of NYSE Euronext and the industry working together to develop a positive solution to address the lack of understanding regarding the extent and nature of ‘dark pool’ trading, which has been a concern for regulators and legislators.” -- Joseph Mecane, NYSE Euronext’s Executive Vice President and Chief Administrative Officer for U.S. Markets
From Todd Wilemon -- Excellent news from the SEC: they just approved the expansion of the penny pilot program for options. The SEC has approved adding another 300 of the most actively traded, multiply listed options classes to the Penny Pilot Program.
Woo-hoo!
"Being smarter and faster than your competitors, whatever your business, has been a guiding principle of companies worldwide for decades. So why are these ideas suddenly thrown out when it comes to high-frequency trading models that have been around for nearly a decade?"
"...[W]e believe it represents the best balance between restrictions and operability, and would therefore promote public confidence without unduly inhibiting legitimate short-selling."
From Steven Poser: The parity model, coupled with DMM responsibilities means there is no better place to send your order for an issue listed on the NYSE or NYSE Amex. Compare our quoted spreads to other exchanges that try to compete with us.
From Todd Wilemon: NYSE Amex Options is happy to announce the new Complex Order Book going live tomorrow, Sept. 9, 2009. The options trading platform that you love because of the speed, transparency and throughput will now be able to handle your multi-leg complex option trades.
From Steven Poser: Spreads have narrowed since Reg. NMS implementation for the highest-volume stocks, where high-frequency trading tend to be more prevalent.
Plus, an interesting historical tibit for today, remembering back to when the market sailed the high seas just before it sunk to the bottom.
Larry Leibowitz, our group executive VP in charge of U.S. Markets and Global Technology, spoke with CNBC earlier today to clarify the issues and our position concerning "flash" orders, high-frequency trading and co-location of servers.
You might have read in Traders magazine about NYSE Euronext's plans to renovate the trading floor, replacing cramped broker booths with modern trading desks, new screens and workspaces, and a new network. Here's CNBC's report on the same subject.
The NYSE trading floor is a great place for a community of agents, and the idea is to make it the most attractive place to represent customers no matter what market you're working, no matter whether you're working an order electronically or physically or both. And I mean attractive in the sense of functionality, flexibility, aesthetics, access to liquidity, and costs.
Media coverage continues to grow on the issue of certain marketplaces holding up orders and giving certain members a look at those orders before they are executed.
NYSE customers are experiencing trade executions and reports within five milliseconds, as well as order and cancellation acknowledgments in just two milliseconds. "For the first time on NYSE, customers can employ the benefits of competitive speed and automation in addition to our longstanding value of high-touch price discovery on the only U.S. exchange cash equities trading floor," says Lou Pastina, executive VP of NYSE Operations.
As I always say, may we never need to consult these procedures, but here they are, just in case.
Hey, a trivia question: How many shareholders were there in the U.S. in 1952?
a) 650,000
b) 1 million
c) 6.5 million
d) 16 million
Read on for the circuit-breakers and the trivia answer.
After I've been nagging you for a week, today it's finally here: the annual reconstitution of the Russell indices, when hundreds of NYSE- and NYSE Amex-listed issues go in and out of the indices.
That also means today is the final installment in our little Great Russells in World History series. I've saved my personal favorite for last. Today's Great Russell is.....
"The paradox arises in connection with the set of all sets that are not members of themselves. Such a set, if it exists, will be a member of itself if and only if it is not a member of itself."
And you didn't think you were going to learn anything today!
From Todd Wilemon: As of July 1, 2009, NYSE Options will no longer charge a facilitation fee to firms who facilitate their customer order flow. We are eliminating the fee for firm facilitation of customer orders. It’s going to zero. Yes, the price is FREE on both exchanges!
As an additional public service to help you keep this big, annual market event in mind for the next week, starting today I'm giving you the first in a series of Great Russells in World History. Collect 'em all.
Today's inaugural Great Russell: .... read on.
In case you missed it: tomorrow is the quarterly expiration of stock and index options and futures. The second quarter is drawing to a close.
Where does the time go?
While you're pondering that, here's an Information Memorandum (is there any other kind of memo? -- I mean, can there be a memorandum without information, aren't we being a little redundant?) about procedures you might want to freshen up on in connection with the expiration.
"If you do it fast and electronically, it's OK, and, if humans do it on the NYSE floor, they get prosecuted," Brown says.
From Todd Wilemon: NYSE Arca has filed a proposal with the SEC to expand the penny program to the top 300 most-actively traded names. This would cover about 75 percent of the daily option trading volume. We have also proposed extending the pilot through 2010. We feel this is the right way forward, giving participants the true bid/ask spread while providing the marketplace with complete transparency.
"The U.S. capital market is still the most mature in the world, has the deepest pool of liquidity and has the broadest shareholder base," said Scott Cutler, the head of listings at New York Stock Exchange parent NYSE Euronext.
As our letter says, NASDAQ and BATS are seeking "to:modify their respective routing strategies to provide preferential treatment for their own market participants before routing orders to away markets" and "provide non-public order information to a select class of market participants at the expense of a free and open market system."
Our market structure has gone astray, Larry Leibowitz told an industry market-structure conference this week; time for everyone to step up and engage in the dialogue about solutions before the opportunity passes.
In the two-sides-to-every-story context, two letters representing the views of hundreds of NYSE floor brokers were sent to the Wall Street Journal to add a bit of balance and reality to an article that appeared in the newspaper’s May 4 edition. The Journal has not printed the letters, and since we feel it's a story worth telling, here are the letters.
The dollar sizes are modest and there aren’t many of them, but initial public offerings and secondary stock offerings are showing a surprising bit of life. “I call it a streak in the first inning,” says Scott R. Cutler, an executive vice president at NYSE Euronext who runs the exchange company’s listing for the Americas.
If you use floor brokers to help you execute your trading strategies (or are considering doing so), you might want to speak with a broker about how their algorithmic capabilities can help them best represent your orders.
In addition to concerns about price discovery and accurate trade reporting, Brigagliano targeted indications of interest sent between dark pools as another potential concern for regulators.
From Todd Wilemon: Well without further ado, I give you are newest order type. Drum roll, please! Please put your hands together, off your seat and on your feet, Ladies and Gentlemen I give you the …”WAIT Order!”
Flashing orders to a select group, even if the group is not limited by the market center's rules, runs contrary to other regulations, though, said Jamie Selway, managing director at White Cap Trading and former chief economist at Archipelago, one of the pioneering ECNs.
Advanced Trading magazine has a 40-photo essay depicting our new NYSE Amex options trading floor at 11 Wall St. Each photo has a caption that tells a little bit of the story of the options market's rebirth.
The average size of NYSE's quote improved to 1,381 shares in March from 771 in August 2008, a 79% increase. In the top 100 issues, quoted size surged to 13,440 shares on NYSE from 4,030 in November.
That's one bit of news from our U.S. Equities newsletter. More after the jump.
Larry Leibowitz, our group exec VP in charge of U.S. Markets and Global Technology, is scheduled to be on Bloomberg TV at 9 a.m. today to talk about restricting abusive short selling.
Deeper liquidity, more accurate price discovery, broader participation, all at one of the most critical times of the trading day.
"The Commission can, we believe, adopt a similar but simple, effective and more
prohibitive Short Sale restriction that takes into account how equity trading has changed
over the past several years since the original Uptick Rule was eliminated."
I actually don't know if today's rally had anything to do with talk of restoring some version of the "uptick rule," which is a restriction on short selling in downward-moving markets. Correlation, causation, who cares -- I'll take today's rally and leave the analysis to the experts.
There still are some people regarded as experts, yes?
Four bits of news today from these parts.
"Every year, roughly 5,000 bills are introduced, while a few hundred pass, he added. DeFazio's hope this time is that the tax becomes part of the Ways and Means conversation about how to recoup the TARP funds. 'I am throwing it into the mix,' he said, 'but I have no expectations.'"
Duncan: "If the question is, 'Would people think it's a fairer game if we had an uptick rule?' the answer is 'Yes.'"
"It would decimate liquidity in the market in an unprecedented way," my boss said.
But what Mr. Ratterman doesn't say is that he's making an apples-and-oranges comparison. BATS trades NYSE-, NYSE Amex- and Nasdaq-listed issues, while NYSE trades only NYSE-listed issues. Let's look at the real, apples-to-apples comparison.
Pricing is one component of enhanced competitiveness; speed is another; the others are new trading tools and rules designed to maximize liquidity. And the only differentiated market model around, don't forget that one. Stay tuned here for more on this front.
From Todd Wilemon: Directed Orders help improve customer executions by providing incentives for specialists and market makers to tighten their quote spreads and increase liquidity at the NBBO. It is yet another reason that customers should come to NYSE Amex to trade.
"The consolidation of the prints...will reduce the amount of manual information to be reported by the [Designated Market Maker], thus increasing the speed and efficiency of the closing process, ultimately improving the quality of both markets with timelier reporting of closing transactions."
Plus: Knight Equity Trading on the balance between high-touch and low-touch trading.
Plus, results for December 2008.
One of his key points: Using transparent, regulated markets to bring more sunlight and liquidity to opaque, less regulated securities would be preferable to writing reams of new regulations.
And which would you prefer: Pottersville or Bedford Falls?
On Wednesday, more than half of the NYSE Alternext US-listed stocks opened within the first 10 seconds following 09:30:00. My understanding is that we expect further improvement in that number in the coming weeks.
NYSE Euronext registered increased trading activity on U.S. cash equities and options exchanges in November and strong year-to-date volume gains across all its global multi-asset platforms.
Plus: One very dark day in rock-music history.
A market on the move. Literally.
With a new address, new benefits for the trading community.
