Archive for the ‘NYSE Exchange’ category

Happy blogiversary, my friends. This humble blog made its debut on this date in 2005, under its original name, HybridTalk. That means you’ve been putting up with my nonsense for three years now. You might be wondering how you’ve stomached me for that long, but consider that my wife has been putting up with me for 23 years, and if she’s reading this, she’s probably saying, “Three years? Hah! Three little years, they think that’s tough? Pikers! Talk to me in five years, or 10! Or 15 or 20! Just wait!”

But I digress.

In those three years, a few BCCs (blog-contributing colleagues) and I have posted 883 items — an average of more than one per business day. We’ve also posted 1,840 comments, or more than double the number of original posts.

From my perspective, it’s been quite a conversation — at various times enlightening, entertaining, gratifying, frustrating, and most of all, engaging. Looking back, I want to thank Exchanges readers for your questions and comments, my business colleagues for helping me find the answers, my Web colleagues for keeping this thing working, and all of you for everything the conversation has taught me. Looking ahead, I want to share some of the lessons I’ve learned (sometimes the hard way), which I keep in the back of my cranium for future mining.

Go ahead, try it; it probably won’t kill you. When I first was talking up the idea for the blog, everyone was supportive, but I also heard numerous reasons not to blog. “What if you get critical comments?” “What if it’s a lot of work?” “What if you run out of things to say?” I had answers for every question; I would moderate the discussion; I would enlist help if the workload got too big; the market will never stop evolving and providing new things to talk about. But in truth, having never blogged before, I had no idea what to expect. All I was sure of was that I wanted to try something different, that we needed to try something different, that we needed a new way to talk with people and have them talk with us. All of the initial questions turned out to be good ones; I’ve printed critical comments, often had more work than I can really handle, and occasionally felt like I had nothing to say. Yet I’m still here, the company is still here, and I think that we’re better for the experience.

Most readers never write, and that’s OK, but… Some posts draw hundreds of page views but only one or two comments. My regular correspondents can be counted on two hands, and I love them because they ask tough questions or offer tough comments, which forces us to think about what we’re doing and how we’re doing it. I also know we have a silent majority of readers who never write, and I blog for them as well. A number of sell-side traders have told me that they never write because it takes too much time to deal with their firm’s process for approving communications. I’m still surprised that NYSE Trading Floor Members don’t write, and that most of my staff colleagues respond only with e-mails, not posted comments. I think that cultural legacies are behind this shyness. Whatever the reason, all readers (and writers) are welcome, and I do want to encourage more comments. The more you put into a conversation, the more you get out of it.

You don’t know what you don’t know. Forgive my ignorance, but before starting the blog, I never knew that NYSE-listed stocks had a big following among traders at “proprietary” firms, and day traders. Comments from these folks have taught us about their perspective, enabled us to respond to some of their suggestions, and have taught me to look for and value every customer, no matter how large or small. And I’m constantly surprised by what people ask about on the blog, how they view our markets and products, and how they react to new developments. But better to be surprised (and informed) by hearing from them than to be in the dark.

It’s hard to enlist corporate bloggers. Going in, I thought that colleagues would be banging down my door, looking to blog about their respective businesses, particularly as our company has diversified geographically and product-wise. Instead, only a few have signed on, and even those contributions have been too sporadic. I need to be a better evangelist, and get in my colleagues’ faces a little more. I know, I know, you’re swamped, you have other priorities, you’re a terrible writer, etc. Welcome to the club. If I can deal with all that, anyone can. I’m here to help you, and in the next year, I’m coming after you.

“That’s where the money is.” Willie Sutton famously said that’s why he robbed banks. The same reasoning applies to why companies should talk with customers and the public online — that’s where the people are. And I don’t mean talking at them — via one-way communications such as press releases and annual reports — I mean talking with them, via blogs, message boards etc. that enable multi-way conversations. I’ve found that even people who can easily get someone on the phone here choose to use the blog in some way.

Blogging complements everything and replaces nothing. I don’t think blogging replaces press releases, newspapers, face-to-face or telephone contact with customers, or anything else. I do know from experience that it can help generate ideas and be a conversation starter for personal interaction. It can help a sales force or a help desk answer a question once for multiple customers. Blogging doesn’t replace other forms of communication, any more than TV replaced radio; but it is a different form of communication with its own unique set of properties and possibilities.

Conversation promotes trust and engagement. During 2003, when NYSE experienced a huge governance and compensation scandal as well as a trading scandal, we withdrew into a defensive shell and lost a lot of trust and good will among customers. I’d like to think the blog has been a small part of the road back. We needed to open up and listen better, and that includes responding to comments and questions on the blog. A number of readers have written that they disagree with some of the things we do (or everything) but that they appreciate our hearing them out. I also think that communicating in a personal voice on a regular basis engenders a trusting relationship that wasn’t there before. On occasion some readers have questioned my veracity (one even called me “Baghdad Bob”) but on the whole, I think that we’ve got a good thing going, and that blogging probably has a higher credibility factor than other types of corporate communication (though that probably isn’t a high bar to clear).

Don’t underestimate the Web’s ability to reach people. You never know who’s reading. Exchanges doesn’t attract the traffic of a Drudge Report, but I’m often amazed at who stops by. Before the blog, I had often read comments and articles from Jamie Selway of White Cap Trading about industry issues; now, unsolicited, he brings conversation here as well. A trader runs into me at an industry conference, sees my name tag and says, “Hey, you’re that crazy SOB who writes that blog for the Exchange!” In my treasure trove of trivia I mention an unknown band on an indie label (the Redundos), and get a note back from their drummer, who was scanning the Web for talk about the band. A new colleague tells me that before she joined up, she checked out the blog and it more than anything else told her that the place was on the right track. When you’re blogging, sometimes you feel like no one’s out there, but sometimes it feels like the connections you make are limitless.

Blogging is fun. Hard. Maddening. Cost-effective. Addictive. I’ve said it before: I wish I could do this full time. I enjoy providing information, applying my inimitable touch (that is, who’d want to imitate it?) and I love the interaction, though I do wish there were more comments and more balance among them. The research and writing can be exacting and time-consuming, but I’m gratified when people say that the blog helps them. Though blogging is labor-intensive, I’d say it offers the best bang for the buck of any form of corporate communication. After initial startup costs of several thousand dollars for software and development, we’ve reached many, many people inside the business and beyond. Blogging also is is way faster and more flexible than other forms of corporate communication. And the blog has become quite habit-forming for me: I know that on a day when I don’t post something, I find it harder to write press releases or focus on the rest of my “day job.” It’s like I need to check in with my pals before getting down to everything else.

The conversation is taking place with or without you. I shake my head at corporate marketing or communications people who talk about “controlling” their brand. Today, a company has input into its brand, but customers and the public have just as much control as anyone else. The Web has given everyone a channel, and nobody a channel: you have to earn your influence on others through transparency, engagement and delivering on promises. The world is talking online about your company, your product, your service; are you going to let that discussion happen without your participation? Are you going to monitor the conversation, join it, or try to lead it? If you’re not already there, I suggest getting in the game. After three years, I’m living proof that you might just learn something, and it won’t kill you.

Sorry for the looong post, and thanks again for your loyal participation. Your comments, as always, are welcome in the space below. In the meantime, happy Tuesday. And you know it wouldn’t be Exchanges without a dose of trivia:

Today in NYSE History (NYSE.com)
09 Dec. 1865 — The New York Stock Exchange moved into its first permanent home at 10 Broad St.


a href=”http://www.nyse.com/press/1228475262908.html” target=”new”>NYSE Euronext Announces Trading Volumes for November 2008 Excerpt: NYSE Euronext registered increased trading activity on U.S. cash equities and options exchanges in November and strong year-to-date volume gains across all its global multi-asset platforms.

NYX Launches Online Exchange-Traded ‘Screener’ for Issuers and Investors Excerpt: NYSE Euronext announced the implementation of an online ‘screener’ for Exchange Traded Products on its U.S. and European markets, enabling users to conveniently search for Exchange Traded Funds and Notes, Warrants and Certificates by classification, key word, symbol and other search terms.

NYX to Present at Goldman Sachs U.S. Financial Services Conference Excerpt: NYSE Euronext CEO Duncan Niederauer will present at the Goldman Sachs U.S. Financial Services Conference in New York City on Thursday, Dec. 11, at 8:45 a.m. ET. A live webcast of the presentation will be available on the NYSE Group’s Investor Relations web site: http://www.nyseeuronext.com/ir.

Happy Monday, folks. I was just checking the historical trivia for today, and wish I hadn’t. This is one dark day in rock history. Yeesh.

On This Day (NYTimes.com) –
1980 — John Lennon is murdered by a deranged idiot;
1995 — Grateful Dead breaks up, shortly after Jerry Garcia dies.


SEC Approves, Again, NYSE’s Fees for Data (WSJ.com) Excerpt: The SEC order, which was finalized and posted on its Web site this week, gives NYSE Arca and other exchanges leeway in setting fees for “non-core” market data. While so-called core data show recent trading activity and the best-available current prices, noncore data include information such as orders to buy and sell shares at different prices.

This is an important decision that enables the exchanges to bring data products to market in a streamlined and competitive manner. The SEC worked long and hard to get to the right answer. The winners will be data-consuming customers and the public in addition to the exchanges themselves.

I’ll try to offer more insight on this with a Q&A next week. In the meantime, if you want to see the decision (100+ pages), here’s the link.


Linkstock: NYSE Alternext US

December 5th, 2008

A sampling of recent news this week re NYSE Alternext US, my new MMC (market-making colleagues):

Big Board, Small Caps (WSJ.com) Excerpt: The U.S. initial public offering market has been largely dormant for months, but movement is afoot elsewhere in the stock listings world.
This week, the listings of hundreds of small and mid-sized companies shifted from the former American Stock Exchange to their new home on Wall Street and the floor of the New York Stock Exchange. The move allows NYSE floor traders to buy and sell a larger number of stocks more seamlessly, though the old Amex listing venue, recently renamed NYSE Alternext US, will be separate from listings on the New York Stock Exchange.

Amex Gets New Lease on Life at the NYSE (Traders.com) Excerpt: Active specialists making tighter markets and improved technology are considered the linchpins to a bright future for the American Stock Exchange, now known as NYSE Alternext. NYSE Euronext completed its acquisition of Amex in October.
Today is just the third day the old Amex market has operated as NYSE Alternext in the Garage of the New York Stock Exchange. But hope is emerging that the new ownership and market model will enable the once-powerful Curb market to regain some of the ground lost in recent years.

ETF Migration From AMEX To NYSE Heading Into Final Phase (IndexUniverse.com) Excerpt: While such a massive move is unprecedented in size for the ETF world, some definite pluses could result, point out industry observers.
One of the major pluses could be to help spur the development of globally cross-listed ETFs for the fund industry’s fastest-growing product line. That’s particularly of concern since the AMEX did not have the global reach of NYSE Euronext.
At the same time, fund companies are making more connections with overseas exchanges. This pursuit of so-called cross-listings in a number of different exchanges for the same ETFs is picking up steam across markets in Europe, Asia, the Middle East and Latin America.

NYSE to ‘Align’ Amex, Arca Feeds (InsideMarketData.com, subscription only)

While I’m on the subject, I’m looking for fellow employees to blog about this business. Members, too. I think the best corporate blog is one where the expert (as opposed to someone like me) talks directly to customers and the public, so I’m hoping to enlist a colleague or two who can talk about NYSE Alternext US. If you want to nominate yourself or someone else or just talk about the possibility, I’m all ears. A lot of nose, too, but…anyway. Shoot me an e-mail, post a comment here, or give me a call.

And on a totally unrelated note, later today:

Brown-Forman to Visit the NYSE and Commemorate the 75th Anniversary of the End of Prohibition (NYSE.com)

Now there’s a happy anniversary. I’ll drink to that!


NYSE Euronext is a member of the Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria, and today — World AIDS Day — we and many, many other companies have signed onto the following “Pledge to End HIV Discrimination and Stigma:”

As a member of the Global Business Coalition on HIV/AIDS, Tuberculosis and Malaria, my company is committed to fight HIV/AIDS discrimination and stigma in our workplace.

We pledge that our hiring, promotion and retention decisions will not be influenced by an individual’s actual or perceived HIV status.

We pledge to take prompt and meaningful action to improve our performance should we determine it falls short of these goals.

Recognizing the power of leadership by example, we pledge to use every opportunity to encourage other business leaders to make the same commitment.

I see the pledge as consistent with our corporate commitment to diversity, which is one of our core values. Inside our company, we see diversity as a means of ensuring our business competitiveness and success, as well as a means of signaling the importance of openness and inclusiveness in our markets and our industry.

I see as well that we’re in good company on this pledge; following is the list of CEOs/ companies that have signed on:

Miles D. White, Abbott
Aigboje Aig-Imoukhuede, Access Bank Plc
Gilles Pelisson, Accor
Cynthia Carroll, Anglo American plc
Margery Kraus, APCO Worldwide
Anne Lauvergeon, AREVA Group
Kabelo Antony Ebineng, Associated Fund Administrators Botswana (Pty) Ltd
David R Brennan, AstraZeneca
Rahul Bajaj, Bajaj Auto
Peter Munk, Barrick Gold Corporation
Werner Wenning, Bayer AG
Edward J. Ludwig, BD (Becton, Dickinson and Company)
Vimal B.Shah, Bidco Oil Refineries Limited
Stephane Bancel, bioMérieux
Birger Sorensen, Bionor Immuno
Debra L. Lee, Black Entertainment Television (BET)
Bill Downe, BMO Financial Group
Dr. Alessandro Banchi, Boehringer Ingelheim
Shumeet Banerji, Booz & Company
Tony Hayward, BP
Michael T. Dan, The Brink’s Company
James Cornelius, Bristol-Myers Squibb
Michael Predeaux, British American Tobacco
Mark Penn, Burson-Marsteller
Dave O’Reilly, Chevron Corporation
Gerald T. McCaughey, CIBC
Vikram Pandit, Citigroup
Muhtar Kent, The Coca-Cola Company
Samer Khoury, Consolidated Contractors International Company S.A.L. (CCC)
Dr. Dieter Zetsche, Daimler AG
N. F. Oppenheimer, De Beers
Blackie Marole, Debswana
Michael Dell, Dell
James H. Quigley, Deloitte Touche Tohmatsu
Gerald Mahinda, East African Breweries Limited
Gennady Gazin, EastOne LLC
Richard Edelman, Edelman
Christian Kemp Griffin, EDUN
John Lechleiter, Eli Lilly and Company
Phirwa Jacob Maroga, Eskom
Martin Vial, Europ Assistance Holding
Rex Tillerson, Exxon Mobil Corporation
Jacqueline Mugo, Federation of Kenyan Employers
Glen K. Murphy, Gap Inc.
Jonathan D. Klein, Getty Images
Alexander Saint-Amand, Gerson Lehrman Group
Andrew P. Witty, GlaxoSmithKline
Dong Soo Hur, GS Caltex Corporation
P. Igathe, Haco Industries Ltd
William A. Haseltine, Haseltine Global Health
Jean-Francois van Boxmeer, Heineken N.V.
Richard Plepler, Home Box Office (HBO)
Victor Y. Yuan, Horizon Research Group
Frank Ireri, Housing Finance Company of Kenya Limited
Anthony L. Howard, Independent Newspapers (Pty) Ltd
Heather Reisman, Indigo Books & Music Inc.
Corrado Passera, Intesa Sanpaolo
Jena Gardner, JG Black Book of Travel
William C. Weldon, Johnson & Johnson
Gerard J. Inzerillo, Kerzner International
Derek J. Oatway, KK Security (Kenya Kazi Services Ltd)
Bruno Lafont, Lafarge
John Anderson, Levi Strauss & Co.
Beatrice Dautresme, L’Oréal
John Demsey, MAC Cosmetics / MAC AIDS Fund
Ian E.L. Davis, McKinsey & Company
Richard Clark, Merck & Co., Inc.
L W Nkuhlu, Metropolitan
Dennis Pinto, Micato Safaris
Samir Modi, Modicare
William H. Roedy, MTV Networks
Robert J. Coury, Mylan Inc.
Gary Ginsberg, News Corporation
Mark Parker, Nike, Inc.
David Stern, National Basketball Association (NBA)
Daniel Vasella, M.D., Novartis
Duncan L. Niederauer, NYSE Euronext
Marcia Silverman, Ogilvy Public Relations Worldwide
Douglas A Michels, OraSure Technologies
Jeff Kindler, Pfizer Inc.
Christie Hefner, Playboy Enterprises Inc.
Naresh S. Mehta, Power Technics
Neil Mehta, Premier Medical Corporation
Maurice Levy, Publicis
Malvinder Mohan Singh, Ranbaxy
Thomas H. Glocer, Reuters
Tom Albanese, Rio Tinto
Simon Cooper, The Ritz-Carlton Hotel Company
Gordon M. Nixon, Royal Bank of Canada
Dr. Ganesh P. Rane, RRR Industries
Matthew J. Wright, Russell Reynolds Associates
Graham Mackay, SABMiller plc
Fred Hassan, Schering-Plough Corporation
Rick Waugh, Scotiabank Group
Ai Lianghua, Shanghai Desano Pharmaceuticals Holding Company Ltd
Pete Ruegger, Simpson, Thacher & Bartlett
Christian Jourquin, Solvay
Gary Watts, SSL International plc
Clive Tasker, Standard Bank
Peter Sands, Standard Chartered Bank
Hiromasa Yonekura, Sumitomo Chemical
Scott Mullin, TD Bank Financial Group
Carol Johnston, Times Media Group
Christophe de Margerie, Total
John Noel, Travel Guard
Marie-Christine de Saragosse, TV5
Patrick Cescau, Unilever
Henri Proglio, Veolia Environment
Mikkel Vestergaard Frandsen, Vestergaard Frandsen
Phillippe Dauman, Viacom International
Sir Richard Branson, Virgin
Martin Winterkorn, Volkswagen
S. Shiryaev, Vostok-Service
Lev Partskhaladze, XXI Century Investments
Mick Davis, Xstrata
Dr. Subhi Quraishi, ZMQ Software Systems

Can companies put words such as these into action to break down barriers and offer opportunity? They can, and they must. The financial-services and technology industries, which historically have not been the most open and inclusive, know that as well as or better than most.

Your thoughts, as always, are welcome.

A hat tip to bloggers Mad Professah and David Mixner for spotting this news.


Welcome, NYSE Alternext US

December 1st, 2008

Today completes the transition of the American Stock Exchange’s equity trading to NYSE Euronext’s platforms, according to this press release. The Amex’s equity unit, now called NYSE Alternext US, brings more than 500 additional listed companies and 150 closed-end funds.

What does this mean for the NYSE Alternext US trading community?
• Faster and more robust trading, connectivity and routing technologies via NYSE Euronext platforms;
• Lower pricing and new, competitive maker/taker pricing model;
• Greater transparency, via NYSE Alternext OpenBook Real-Time and NYSE Alternext OpenBook;
• Exposure for NYSE Alternext US securities to the NYSE liquidity pool;
• Streamlined access to the marketplace via a new trading-license model;
• Next-generation market structure leveraging the NYSE model;
• Enhanced opening and closing processes;
• Streamlined rule set and post-trade processes;
• Overall, improved functionality and customer experience.

Other key parts of this integration:
• More than 650 exchange-traded products have moved their listing to NYSE Arca from the Amex, and that transition will wrap up this month;
• The final piece is expected to come in February 2009, when NYSE Amex Options opens its new trading floor at the NYSE.

Today also is a historic day for a marketplace whose history traces back to the 1790s — as long as the NYSE’s. For as long as I’ve been here (and no, you wise guys, that’s not 200+ years), the Amex’s location has been referred to on the Street as “across the cemetary,” that is, on the other side of the Trinity Church cemetary. Today, the Amex equity traders walk instead into 11 Wall St., the new home of NYSE Alternext US. To all of you, and your customers, we say welcome.

Speaking of history, a little shot of trivia for your Monday morning:

Today in NYSE History
01 Dec 1873 — Regular trading hours were established - 10 a.m. to 3 p.m.; Saturdays, 10 a.m. to noon.

I move that we go back to 10-3, but none of that Saturday stuff. Anyone second the motion?


This information memo lays out very thoroughly (13 pages) and in simple-enough-that-even-Pellecchia-will-get-most-of-it language the major changes in the NYSE trading model we’ve been talking about lately on this humble blog.

Topics include:

– Enhanced reserve interest capabilities;
– Designated Market Maker (DMM);
– Priority and Parity;
– eQuotes to OpenBook;
– d-Quote enhanced functionality; and
– Elimination of CAP (Convert and Parity) orders.

When I say “thorough,” I mean that the DMM section alone includes the following parts:

– Transtion from Specialists to DMM and DMM Units;
– DMM and DMM Unit Obligations;
– DMMs retain an affimative obligaton;
– DMMs no longer have a negaive obligation;
– DMMs are not the “responsible broker dealer” for agents’ orders;
– DMMs have Depth Guidelines and Minimum Quoting Requirements;
– DMMs retain stabilization requirements;
– Information available to DMMs;
– Handling manual transactions;
– DMM Interest and DMM Capital Commitment Schedule;
– DMM Interest and DMM Algorithms;
– Limitations on the Execution of DMM Interest;
– Capital Commitment Schedules (CCS);
– Execution Logic for Trades Involving CCS Interest; and my personal fave:
– Using CCS Interest for Price Improvement.

You get the idea. I think there’s a lot of useful info here, and I’ve been trying to to think of a way to break it out somehow, but until that scheme comes to me, preferably with a slathering of cranberry sauce, here’s the whole kit and caboodle.

In the meantime, I hope you and yours truly enjoy your Thanksgiving.


If you’re interested in what’s going on from a competititve standpoint at the New York Stock Exchange and at parent NYSE Euronext, quit reading this stupid blog and pick up the November issue of Institutional Investor, which has two articles you might want to see. Note, both of these links are subscription-only:

1) Up Off The Floor, which looks at the impact to date of the new changes in the NYSE trading model. Excerpt:

After two centuries of dominance, the exchange was steadily losing ground, surrendering crucial market share to electronic rivals; a decade ago, according to Edward Ditmire, a stock analyst at Fox-Pitt Kelton, 80 percent of the daily trades in shares issued by companies listed on the NYSE were executed at NYSE. In October that figure was 42.8 percent. The good news, though, is that NYSE Euro­next gained share in September, reversing a year-long slide. The market share for October was up from 41.9 percent in September, which was up slightly from 41.4 percent in August. ­That’s still well below the 59.8 percent it logged at the end of 2007, but at least the decline has been reversed. Exchange officials are encouraged to think that in a time of extreme stress traders are turning to them. “This difficult environment is giving us a chance to prove our value to all our clients,” says Lawrence Leibowitz, head of U.S. execution and global ­technology.

Further, exchange officials say that overall numbers reflect even greater strength during the most critical periods of the day, when prices are set. “We are now transacting the lion’s share of the trading business during the open and closing hours of the market, because we are able to handle those volumes at a time when other markets seem too nervous to quote in size,” [CEO Duncan] Niederauer ­says.

Adds the managing director of trading operations at one bulge-­bracket firm: “Sometimes it feels as if the stock exchange is the ­only place that I can count on to act the way it’s supposed to.”

Niederauer still faces difficult challenges. The core business is under assault by digital technology, deregulation and globalization, and the company needs to find new sources of revenue and growth. “There ­aren’t many companies that have ever gone through such a massive transformation. The problem they face today is that they have to take all the raw material they have and make it work properly,” says ­Ditmire.

I can’t vouch for those market-share numbers; they sound to me like NYSE and NYSE Arca combined rather than NYSE stand-alone. I do see that the NYSE Trading Floor is participating more, reversing a long trend of decline. The rollout of our changes is still in progress and I’m cautiously optimistic about the impact, but I also want to note that as I’ve said before, what we’re doing is not a panacea for everything that ails today’s fragmented, hyper-competitive, highly automated, penny-increment markets.

2) Trading Costs Are Rising is based on Elkins/McSherry’s annual survey of all-in trading costs at markets and firms around the world. For at least the third consecutive year, the survey finds that NYSE-listed stocks have the lowest trading costs of any in the world. Excerpt:

The NYSE, the flagship of multinational giant NYSE Euronext, now trades a minority of its own listed shares, as the liquidity has shifted to the Nasdaq and alternative venues, but the NYSE has done its part to push institutional trading efficiency. Handling more than 500 million shares a day in blocks of 10,000 or more, the NYSE is “still the largest block destination on the Street, but we ­don’t always get ­credit for that,” says Joseph Mecane, the Big Board’s executive vice president and chief administrative officer for U.S. markets. Stealing some of that thunder are block-­execution specialists like Fox River, Liquidnet and Pipeline Trading Systems, all ranking high in Elkins/McSherry’s brokerage league tables in terms of bettering ­global benchmark averages.

Not only are NYSE-listed stocks cheapest to trade, but the cost continues to decline, year after year:
2008: 13.89 basis points
2007: 14.80
2006: 17.51
2005: 23.26
2004: 25.87

Happy Friday, folks. A morning injection of historical trivia: how many of you were around for the following?

Today in NYSE History (NYSE.com)
21 Nov. 1983 — The stocks of the seven “Baby Bell” companies - spun-off in the AT&T divestiture - began trading, adding 1.5 billion shares to the list in a single day.


Another bit of good news that came out yesterday is that effective Monday, Nov. 17, NYSE will no longer need to halt stocks whose price falls below a buck and route any orders in those stocks to our sister NYSE Arca platform.

We’ve changed our system to be able to recognize sub-penny prices at which other markets might quote those stocks, so we can route to those markets if appropriate, as required by Reg. NMS if another market posts a better price.

Just to be clear: these halts were for operational reasons, as distinct from a regulatory halt that is implemented when a company’s stock no longer meets our listing standards. All of these continued throughout to be listed on NYSE; they were just traded on our NYSE Arca platform because of this operational reason.

The details of the change are in this NYSE Trader notice, along with a link to the list of affected stocks and the rule filing about this change.

Hey, I forgot the historical trivia in my post earlier today! Our switchboard has been flooded with complaints, people have been threatening to cancel their subscriptions, and…wait…what’s that? We don’t have a switchboard?

Ahem. Anyway. To put the world right again:

On This Day (NYTimes.com) in 1972, the Dow Jones Industrial Average closed above 1,000 for the first time.

The Times’ article about the event, which is worth reading as a historical artifact, recounts:

At 3:29 P.M., red light bars flashed on above and below each of the time clocks surrounding the trading floor of the New York Stock Exchange. This was the traditional visual signal to show that one minute of training time remained. At the same moment, a bell began clanging on the speaker’s rostrum - the auditory warning.

Traders, brokers and clerks on the floor - aware that history was in the making - broke into cheers that lasted about 20 seconds. Some paper was tossed in the air and drifted down like confetti.

Several hundred persons on the floor then turned to face newsreel cameras grinding away on the member’s gallery, some brokers waving like fans at a football game.

Big Board volume also gave the exchange community something to cheer about. It rose to 20.20 million shares, picking up the tempo as prices climbed.

An office broker, watching the stock tape from his desk downtown, murmured in wonderment: “There’s a sort of renewed confidence in the whole economic outlook.”

That confident outlook would soon be stomped by the bear market of 1973-74.


Yesterday, NYSE completed the rollout of Phase 1 of our next-generation market model, and began Phase 2.

For those tracking these changes, here is the complete list of issues and when they joined Phase 1.

Now, for all of our issues:
– Designated Market Makers trade on parity with others, and no longer act as agent (as Specialists did) for orders on the limit-order book. DMMs are now paid based on their quoting and trading performance;
– Customers now have a choice of two types of reserve orders: Dark Reserves, which are completely hidden to the DMM and are available to trade with all electronic orders; and Block Reserves, which are eligible for price discovery on the Trading Floor and have a requirement of at least 100 shares displayed.

In Phase 2, DMMs’ electronic responses to incoming orders will be pre-programmed into a Capital Commitment Schedule that will be part of the DispIay Book. When fully implemented, this will reduce order latency by as much as a third and will eliminate what little is left of the advance look at incoming electronic orders.

We aim to complete this phase in early December. My understanding is that we won’t publish a list of Phase 2 stocks — this phase involves no change of action on the customer’s part — but we’ll keep you apprised of progress.

On a personal note, if you’re wondering why the market fell sharply yesterday and then rallied back even more sharply, with the Dow ending up more than 500 points after a 900+-point swing, I don’t know, but it has NOTHING TO DO with the fact I had the day off. Really. I swear. I’m not going there again.


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