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December 1, 2000

The Big Board's Point Man: Improving Upstairs and Downstairs Technology

By Editorial Staff

Meet Louis (Lou)Pastina, a vice president at the New York Stock Exchange in charge of point of sale technology. His watch includes the Broker Booth Support System (BBSS), the NYSE's trading software that connects "upstairs" block traders with their counterparts on the floor. The NYSE, of late, has trumpeted its improvements and the growing acceptance of the BBSS' wireless handheld devices used by floor traders. But other, less ballyhooed features also deserve notice.

Peter Chapman of Traders Magazine caught up with Pastina.

TM: Lou, you added three new features to the BBSS recently. Please tell us about them.

Pastina: First, let me note that these changes result from our continuous drive to improve productivity at the exchange. In 1979, for example, we traded 30 million shares with 3,000 people. Today, with the same number of people, we routinely trade one billion shares. Improvements to the BBSS makes that possible. There are 1,000 terminals on the floor and 150 upstairs.

TM: Can you give us some specifics?

Pastina: As you mentioned we are introducing three new features. In October, we coded in a program that will dynamically aggregate all of the orders in a particular security on a trader's blotter. Floating windows, or those that can exist separate from the main BBSS window, display these aggregated positions. That way both upstairs and floor traders can instantly see where they stand.

Also, in October, we introduced a feature that allocates reports against orders.

TM: How does that work?

Pastina: As an example, assume a floor trader gets 10 orders of 10,000 shares each for a total of 100,000 shares. He then executes 10,000 shares. Before he had to manually allocate 1,000 shares to each account. The new BBSS feature now does all that work for him.

TM: Your third feature sounds very sophisticated.

Pastina: Yes, it is. We've expanded the order-entry screen to make it easier for both the floor trader and the upstairs trader to handle multiple order types.

TM: Please give us an example.

Pastina: Gladly. A customer wants to send an order to the floor to buy 50,000 shares. The member is willing to "facilitate the execution," or use the firm's capital, because there may not be any natural sellers. The member firm also has a sell order in hand for 10,000 shares of the stock at the price.

That sell order will be "crossed" at the point of sale with 10,000 shares of the buy order. The firm will enter a sell order of its own to "facilitate" the remaining 40,000 shares. And, finally, since the firm may not have the stock to actually sell, a buy order to "cover" the sell order of 40,000 shares must also be entered. So there are actually four orders to be entered. Now under the NYSE's pending rule 123, all those orders must be entered before the broker can represent them at the point of sale. BBSS now allows the quick entry of those orders with just a couple of key strokes, rather than entering four separate orders, freeing the broker to go do what they do best: execute orders."

TM: Thank you.