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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March 1, 2002

Will New Nasdaq ProductEat Data Vendor's Lunch?

By John A. Byrne

A product that provides volume and other trading activity in Nasdaq stocks - owned and operated by Nasdaq - is hitting the desks.

Nasdaq PostData's arrival comes three years after the NASD filed a proposal with the SEC to establish the fee-paying service for subscribers and market data vendors. The product, which was criticized in its original form by Thomson Financial, operator of similar services sold by AutEx/BlockDATA, will provide three distinct data reports: daily share volume in selected Nasdaq securities; monthly volume summaries that rank the top 50 market participants; and summaries of the previous day's activity for every Nasdaq issue.

AutEx/BlockDATA, which dominates its vendor niche and may have reason to fear PostDATA, taps into Nasdaq for the data it repackages. (An affiliate of Thomson Financial owns and publishes Traders Magazine.)

In its criticism, Thomson singled out Nasdaq's potential "business advantage" and also said that, because Nasdaq pays nothing to collect the data (and is actually paid to collect it), it should only be able to recover from vendors the costs incurred from passing the data to the vendors.

Adena Friedman, senior vice president of Nasdaq Data Products, said the new product was introduced in response to "widespread demand." It would give users a "decisive advantage in an increasingly competitive marketplace," she added.