Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

Traders Poll

Are you in favor of a pilot program and examination of the rebate system by the SEC?




Free Site Registration

July 31, 2004

ArcaEx Ramps Up for an Advanced Auction Mart

By John A. Byrne

The Archipelago Exchange (ArcaEx) is planning to establish one of the most highly-developed electronic auction markets in the world, pending a successful IPO.

The ECN-turned-stock exchange - hoping to have its IPO soon - was coming closer to taking that giant step recently prior to the quiet period of the stock offering, according to industry sources. However, it turned down a deal to acquire PDQ - the acronym for Procedure Derived Quotes - an innovative system built by ExchangeLab.

ExchangeLab is a small technology incubator in New York City, run by former NYSE technology executive Chris Keith. Despite the change of plan, the talks foretell a period of massive spending on elaborate systems by ArcaEx in a post-IPO environment, trading executives say.

PDQ is regarded as a more sophisticated version of the failed Primex trading system for listed and OTC stocks. The main idea behind PDQ is the centralization and replication of trading interest on a floor similar to the NYSE's.

ArcaEx declined to comment, citing the IPO quiet period rules. Chris Keith of ExchangeLab said he could neither confirm nor deny the story.