National Stock Exchange Offers ‘Double Play’
Traders Magazine Online News, December 28, 2012
The National Stock Exchange is offering its members a new order type that routes directly to a competing venue, bypassing the exchange’s book, according to a filing with the Securities and Exchange Commission.
The order type is modeled on those once offered by ECNs to those customers that wanted direct access to the New York Stock Exchange and the old American Stock Exchange.
Called “Double Play,” the order type is a market or limit order that instructs the National’s trading system to route the order to one or more away markets, including exchanges and dark pools.
At present, the order type cannot be used to route to the Chicago Stock Exchange.
If the order is not filled at the recipient venue, it is returned to the exchange and posted on the book.
The order type is similar to one offered by BATS Exchange since 2008 and Nasdaq since 2007. Nasdaq incorporated the order type after acquiring the ECNs Brut and Inet. Both of those venues offered their customers the order type so that they could trade directly on the NYSE and Amex.
The benefit of Double Play, the National told the SEC, is to enable its customers to access a liquidity venue “that may offer a faster response time and a lower fee.”
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