RT-Anyone have thoughts about Primex? Nasdaq to Implement Primex Trading Tool
Dec 6 11:47am ET
NEW YORK (Reuters) - Nasdaq plans to implement a new tool, which will allow users to electronically mimic the traditional auction style market, into its stock trading system on Dec. 17, the No. 2 U.S. stock market said on Thursday.
The new optional trading tool, called the Primex Auction System, allows share dealers to actively compete for stock orders by improving the price they are willing to pay for a certain order. Nasdaq's current system lets share dealers post the price at which they are willing to buy or sell stock and traders pick which dealer they want to handle their orders.
Primex's auction-style market copies the trading system at the New York Stock Exchange, where screaming brokers crowd around posts on the Big Board's storied trading floor. The NYSE has long said that its system offers the best stock prices and has no plans to offer Nasdaq-style trading options.
Nasdaq has maintained that its system of competing share dealers, called market makers, provides the best prices for investors.
The U.S. Securities and Exchange Commission's decision that all stock prices must be traded in decimals rather than fractions has done more for prices than either system of trading. Decimalization immediately narrowed the trading spreads, the difference between what a buyer and seller are asking for a stock, on both markets, giving investors better prices.
Traders will be able to use Primex for the 30 stocks that make up the Dow Jones industrial average on Dec. 17. Additional stocks will be phased in to the system incrementally, Nasdaq said.
"We are expecting a very gradual build in usage because of the limited number of issues included in the roll-out as well as the time needed for order management and order routing vendors to integrate their systems." Nasdaq Senior Vice President Gene Lopez said in a statement.
More than 60 market users have already signed up for Primex, Nasdaq said. Nasdaq, which already is able to trade all New York Stock Exchange securities via the intermarket trading system, has waived all fees related to trading with Primex through March.
Primex is just one of the new trading tools Nasdaq, which is also planning to offer shares of itself to the public, is adding to its system. The stock market recently rolled out a new trading system called SuperSoes, which lets users automatically process share orders, and it is putting the finishing touches on its SuperMontage system, which will show a broader array of bids and offers for stocks. |
