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Four of the six charges against former NYSE chairman Richard Grasso have been overturned regarding his $187.5 million compensation package. The final outcome?

Grasso will settle the case
NY State will not pursue the case
Grasso lost his reputation, regardless
Not Spitzer's worst decision but up there

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Options Department

Industry News

Nasdaq Sees Options Edge in New Statistics

Nasdaq Options Market, which launched in March, is betting it will outperform its competitors under some of the new execution-quality report guidelines expected to be recommended by the Securities Industry and Financial Markets Association.

More Options Exchanges Plan to Hide Quotes

Now that Nasdaq's Options Market is up and running, its competitors are making plans to copy one of the market center's signature--and controversial--order types. In doing so, they may be pushing the industry into full-fledged penny quoting.

BOX-Nasdaq Marriage of Convenience to End

The Boston Options Exchange wants to be its own master. BOX plans to part ways with Nasdaq and apply for its own exchange license.

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Articles from Traders Magazine

SEC Watching Options Take Fees

The Securities and Exchange Commission, in the wake of concerns raised by options exchanges and traders, won't permit options exchanges to charge access fees over a certain limit. "We're certainly not fond of take fees that cross the increment," said Erik Sirri, director of the SEC's Division of Trading and Markets, referring to the minimum allowable quoting increment for options. If the fee crosses the increment, Sirri added, "that would be an issue."

ISE Calls for Move to Pennies

The International Securities Exchange, in a turnaround, is now calling on the options industry to forget the penny pilot and move directly to penny quoting across the board. But the recommendation comes grudgingly, since the ISE did not previously favor penny quoting for all options. Gary Katz, the ISE's chief executive, says the new stance was driven by the Securities and Exchange Commission's approval of the Nasdaq Options Market, whose rules include the ability to maintain hidden quotes in penny increments in non-penny names. That means Nasdaq could have better prices than other exchanges in some options, although those prices would not be displayed publicly to investors and other exchanges.

GETCO Aims Toward Options

GETCO, one of the largest providers of liquidity in equities, plans to step up its participation in U.S. options. Brian Nigito, an executive at GETCO, said his firm is currently "underrepresented in options." Speaking at an industry conference in Las Vegas in early May, Nigito said GETCO could make a go of trading options on an exchange employing either price-time priority with maker-taker pricing or the traditional pro-rata dealer model with customer priority. In

ISE Proposes New Customer Category

The International Securities Exchange's recent big win in convincing the Securities and Exchange Commission to publicly notice its request that high-frequency trading by public customers get mandatory treatment as "professional orders" came as the ISE successfully ushered a "voluntary professionals" category past the SEC. In May 2006, the ISE asked the SEC to allow it to mandate that broker-dealer members identify orders from certain public customers as "professional orders." Those active, high-volume customers executing 390 or more trades per day (one trade per minute) would meet that definition and have their orders treated as broker-dealer orders with regard to execution priority and transaction fees. The SEC published that filing for comment in February, after a 20-month delay, and after the ISE in January filed an amendment to the original request, clarifying its plans.

CBOE Automates Buy Writes

It's now faster and cheaper to buy a stock and write a call option on it. At least, that's what the Chicago Board Options Exchange said. Its stock market unit, CBOE Stock Exchange, has begun automating buy-writes.

Redoing Ties that Bind

Trading large lots could get easier under a plan being put together by the industry's options exchanges. The International Securities Exchange and NYSE Arca, hoping to speed up trading in a marketplace that has become much more fragmented under the "penny pilot," are spearheading a redesign of the industry's Options Linkage Plan. The proposal is intended to make sweeping multiple exchanges faster for large-lot traders by incorporating elements of the equities market's Regulation NMS. "We have a consensus of all the exchanges to move forward and replace our current linkage with a more Reg NMS-like linkage plan," says Mike Simon, the ISE's general counsel and chief regulatory officer. "I think one year from now, we will have it implemented."