Commentary

Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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Should have had a pilot program a long time ago.

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July 31, 2001

SuperSOES Begins to Transform Nasdaq

By Peter Chapman

Last month's successful debut of Super- SOES made negotiation a thing of the past for traders of 3,500 Nasdaq National Market System (NNMS) securities.

SuperSOES replaces the accept/decline functionality of SelectNet messaging with automatic executions, transforming the inter-dealer market into an order-driven agency marketplace.

Order-Driven Market

Another 1,500 stocks in the Nasdaq SmallCap Market are under consideration for SuperSOES trading as well, according to Nasdaq. The new trading regime, which eliminates dealer-to-dealer interaction, is the latest of many rule and systems changes since the mid-90s. These changes are reshaping Nasdaq trading.

"Nasdaq has gone from a purely quote-driven market to one with a mixture of quotes and orders [on ECNs] to a purely order-driven market," said Jim Toes, a director of Nasdaq trading at Merrill Lynch.

Before SuperSOES, a market maker quote was considered an invitation to trade. A dealer didn't have to disclose his entire trading interest. "Now, I'm no longer quoting $10, for example," said Toes. "I'm telling Nasdaq I am willing to pay $10 for a certain amount of shares."