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Michael Ruvo
Traders Magazine Online News

Prevailing Market Price: Critical Issues Ahead of Deadline

In an exclusive to Traders Magazine, BondWave's CEO warns fixed income participants that they have less than two months until the May 14th deadline for the implementation of the mark-up disclosure rule and the implementation of the PMP "waterfall" approach for fixed income.

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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."