Equity Trader Alert #2018 - 3 Nasdaq to Implement the Midpoint Extended Life Order

ajacobson

ajacobson

Kinda interesting.

Subject to SEC approval, on March 12, 2018, The Nasdaq Stock Market (“Nasdaq”) will introduce the Midpoint Extended Life Order (M-ELO).

M-ELO is a new order type that is designed to attract and unite counterparties with longer-term investment horizons. M-ELO orders will only execute against other M-ELO orders at the midpoint of the NBBO. For more information regarding M-ELO please click here.

As announced in Equity Technical Update #2017 - 5, entering an M-ELO requires a new Cross Type code of “E” and a Display instruction of “M”

Cross Type / Cross Trade Flag (FIX) Explanation
E Extended Life Order
Nasdaq will also add a new liquidity code on all M-ELO executions.

Liquidity Code Description
n Midpoint Extended Life Order Execution
Testing Opportunities
Testing is currently available in the Nasdaq Testing Facility (NTF). Production testing will be available during the February 3 and March 10 UAT.
 
HA!
Hilarious.

Instead of a "Dark Pool",
NASDAQ responds with a "More Light" Pool.....
Good for them.

I'll bet it gets business, too -- all of the higher price-elastic buyers+sellers, who don't mind an order hanging out a while.... Would be interesting to see when those Mello quotes are inside the NBBO, coincident with, or outside the NBBO. There's a few papers/research proposals to be had here.
 
Stratified liquidity is fucking stupid. Schemes like this only serve to break markets further then they already are.
 
i960 said:
Stratified liquidity is fucking stupid. Schemes like this only serve to break markets further then they already are.
More...

I agree with your greater point, but I don't think it'd apply in this case -- no different than Mkt/Limit/Mid orders .....
 
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