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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 227.35+0.3%Dec 19 9:30 AM EST
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To: Lizzie Tudor who wrote (50945)4/16/1999 9:22:00 PM
From: Glenn D. Rudolph  Read Replies (1) of 164684
 
But at the largest options exchange, the CBOE, the form of price-fixing allegedly occurring at the
Amex seems less likely. At the CBOE, market makers shout at each other to compete for business,
in this fashion exchanging bid-ask quotes that are written down by exchange employees and then
shown on trading screens. By contrast, at the Amex, prices are set by the specialists, and floor
price ''reporters'' do not play the active role of their counterparts at the CBOE.

Resolving this problem would require a change in the way prices are reported--which SEC
Chairman Arthur Levitt Jr. proposed in a letter to the options exchanges on Feb. 10. He observed:
''It is now feasible for each competing market maker to publish its own quote''--an innovation that
would do away with any two-tiered pricing at the exchanges, the Amex included. With that
proposal, Levitt appeared to acknowledge at least the potential for discriminatory pricing at the
exchanges.

Amex Chairman Richard F. Syron expressed surprise and chagrin when told of the alleged two-tier
pricing. Syron says even the most informal price-fixing arrangements are simply not acceptable at
the exchange. ''That would be wrong. That should not happen....There can't be tacit agreements.''
Syron, however, does not believe the allegations. ''It is not at all infrequent to have one group [the
traders] complaining about the other group [the specialists],'' he says.
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