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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: KFE who wrote (1839)	12/3/2000 11:26:51 PM
From: Dan Duchardt	Respond to of 2317

Ken, I was aware that these crossed market limitations were being proposed, but had not heard of the "remedy" of busting trades. I know that my broker (Interactive Brokers) argued strenuously against implementing such restrictions as being anti-competitive, but has conceded that they lost the fight. Of course, Nasdaq has for years restricted locked and crossed markets in the quotes they post in their montage, the theory being that every execution that crosses an existing quote is "unfair" to the first poster. I can see the logic behind that, but in the Nasdaq case there is still no protection against the first best quote being bypassed in favor of later time quotes at the same level, and there has always been a mechanism that permits executions across the inside market. SuperSOES is supposedly a remedy for that, but includes other aspects that will keep ECNs from participating and will perpetuate the lack of time priority. As far as I can tell, the options exchanges are not enforcing time priority either, though I think at one point that was supposed to be one of the SEC's goals. I'm not up on the latest with this, but I think egregious is the right word to describe CBOE's heavy handed approach. Dan