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.

Traders Poll

Do you think it's a good idea to conduct an access fee pilot to assess the pricing models used by many trading venues?

Yes

67%

No

0%

Should have had a pilot program a long time ago.

33%

Free Site Registration

June 4, 2007

NYSE Gets A Makeover

By Peter Chapman

Stocks? Floor trading? Any doubts that NYSE Group was going through a major transformation have been dispelled by recent events.

The just-completed merger between NYSE Group and Euronext and the successful implementation of the New York Stock Exchange's hybrid model have taken the Big Board far from its roots.

Grafting automatic executions onto the New York's traditional floor-based auction environment has resulted in an almost complete flip in the ratio of manual to electronic trading. Prior to hybrid, the Big Board was executing about 10 percent of its flow automatically under its Direct+ system. Automatic executions now account for more than 80 percent of all shares traded. No more than 20 percent of the shares are exchanged by humans on the floor.

The data emerging, following the historic merger between NYSE Group and the Paris-based Euronext, is equally telling.

If the newly combined organization had existed last year, then 19 percent of its revenues would have come from trading derivatives. That compares with 25 percent from trading cash equities-12 percent in the U.S. and 13 percent in Europe.

NYSE Euronext has a small presence in stock options in the U.S. through its NYSE Arca unit, but the bulk of derivatives revenues now come from Euronext.