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Spoofing, Surveillance and Supervision

Jay Biondo, Product Manager - Surveillance at Trading Technologies, co-authored an article along with James Lundy and Nicholas Wendland, both of Drinker Biddle & Reath LLP, reviewing the CFTC's regulations and expanding efforts, 21st century surveillance and supervision, as well as strategic recommendations.

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January 3, 2006

NYSE-Listed Volume Expected to Skyrocket

By Michael Scotti

Gentlemen, start your OMSs. The volume of shares traded in New York Stock Exchange listed securities is expected to double or quadruple once the Big Board goes electronic with its hybrid model in June 2006, according to industry pros. Many believe that speed, as well as the greater certainty of executing and canceling orders, will bring in more volume from professional traders.

Tom Troy, executive vice president of Bear Wagner Specialists, told an audience at the Security Traders Association's annual conference that he wouldn't be surprised if volumes increased anywhere from two to four times in NYSE-listed securities. That would occur within two years of the NYSE's move to auto-ex, he said.

Troy based his prediction on events in Europe in the 1990s. Exchanges there went fully electronic in the mid- to late-1990s. The sweep function of the hybrid market will also force floor brokers to represent more of their orders in the book, Troy told Traders Magazine, whether those orders are displayed or in reserve; otherwise, they face the risk of missing trades.

"The auto-ex function will force traders to make decisions," Troy said.

Matt Andresen, president of Citadel Execution Services, said he expects listed volume to double within six months of hybrid's launch.

After that, he expects "a considerable ramp up from there."