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Traders Magazine, January 2004

Editorial Staff

Chicago *The Chicago Stock Exchange (CHX), in a bid to attract more professional order flow, is introducing ECN-like automatic executions. The Windy City bourse is planning to implement, by mid-year, a mechanism to satisfy fast-draw pros, such as statistical arbitrage traders and options market makers. These traders, who typically want immediate executions, get impatient with the CHX's current execution speeds, according to CHX president Dave Herron. They will regularly cancel orders within a few seconds if they aren't filled. New auto-ex functionality would not obligate the Chicago's specialists, a group that has de-emphasized guaranteed fills since the advent of penny ticks. It is intended chiefly to facilitate matching of orders from customers and from market centers that arrive via the Intermarket Trading System (ITS). To make the new system work, the CHX also plans to grant automatic executions to ITS orders. That way, an ITS order will have a chance to trade against a stat arb trader's limit order, for example, before it is cancelled.

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