Option Exchange Developments

[def]

An article you may find interesting:

http://www.wallstreetandtech.com/story/electronicTrading/WST20021007S0003

 

[hardrock375]

Def,

Thanks for this. Great article.

 

[Trajan]

The PCX has dropped to fifth!

In the past, says an exchange spokesman, only PCX specialists - known as Lead Market Makers (LMMs) - were authorized to electronically enter two-sided quotes. But, after PCX Plus goes live, any PCX market maker will have the power to electronically enter bids and offers from any remote location. Moreover, via PCX Plus, both LMMs and competing market makers will have the ability to enter two-sided markets for options traded in any pit across the exchange's floor. In other words, if you are standing in one crowd but want to electronically post a bid and an offer for a contract traded in a pit on the other side of the floor, you will be able to do just that.

Why would you need to stand in a pit six and a half hours and develope back problems? Wouldn't this hasten the floors demise?

On the CBOE:

"What we're doing is allowing our floor-based market makers to electronically post (quotes) ... . But the requirement is, if you're going to quote in a particular option, you have to have someone in the crowd who is representing those quotes,"

They must be colluding with chiropractors.

But the CBOE chose not to emulate the remote component of the PCX Plus system for a couple of different reasons. Firstly, says Brodsky, the CBOE did not want to devalue the cost of a seat on the exchange.

That's the reason it has taken four years to roll these things out. People knew electronic trading was going to kick the floors butt four years ago but the reactionary forces were too myopic to look beyond the current power structure which had served them so well for many years.

It is interesting but doesn't goes far enough. Looking on the PCX website, it says that quotes are only good for 1 up on firm and mm orders. They still can't let that go.

There was an article recently about the BOX:

Article on BOX