Commentary

Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

Traders Poll

Would you feel better if the Chicago Stock Exchange were purchased by U.S. firm or consortium rather than a foreign one?

Yes

73%

No

4%

Doesn't matter to me

23%

Free Site Registration

February 24, 2006

What's Driving the NYSE's Hybrid Strategy

By Peter Chapman

In the aftermath of Department of Justice's approval of the New York Stock Exchange/Archipelago Exchange merger, many wonder why the Big Board needs its hybrid plan. Why not just offer traders automatic executions via Arca instead of retrofitting the Big Board?

NYSE exec Bob McSweeney answered this at a recent Security Traders Association event.

"It would be extremely easy for us to have two separate models running side by side... But the purpose of getting so complex was because we want to continue to aggregate that liquidity. So that those who are accessing the market for automatic execution have the benefit of accessing liquidity that is resident with the floor broker. The broker can choose then to scale that interest in an agency interest file, a blind file. Then the order may not sweep up four cents. It may only sweep up two cents because that is resident liquidity within the auction that would not otherwise be available to the auto-ex market. Also, the floor brokers themselves would not miss the market when representing large orders as an auto-ex order sweeps through an ECN-like platform."