Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TFF who wrote (11119)	1/15/2004 1:58:40 PM
From: TFF	Respond to of 12617

US options competition to intensify with Box By Jeremy Grant in Chicago Published: January 14 2004 18:44 \| Last Updated: January 14 2004 21:24 Competition in the US options industry was set to intensify with approval on Wednesday by US regulators of plans by the Boston and Montreal stock exchanges to launch the country's sixth options exchange. The new exchange, known as Box, will only offer electronic trading, becoming the second US exchange to operate this way. The other is the International Securities Exchange (ISE), which has grown rapidly using electronic trading since its launch three years ago. The entry of Box is a further sign of the growth of electronically-traded derivatives in a market that has long relied on face-to-face trading in "open outcry" pits. Chicago's two big futures exchanges have seen significant growth in the amount of trades carried out electronically. One of them, the Chicago Board of Trade, is preparing to head off a challenge from Eurex, the European exchange, which plans to launch an all-electronic US-based futures exchange next month. Electronic trading is generally cheaper for investors than "open outcry" because trades can be carried out without specialist market makers operating in a trading pit. Ken Liebler, chairman of the Boston Stock Exchange, said: "Box offers a real alternative as the only options market that is truly anonymous and isn't based on whom you know or who you are, but when your order arrives at its electronic [order] book." He said Box would start operating by the end of this month, offering five equity options - that is, options on individual stocks. An option gives a buyer the right to buy or sell a stock for a fixed price at a later date and is a bet on the future direction of a stock. The amount of equity options offered would be expanded to about 250 over the next 2-3 months, Mr Liebler said. Investors in Box are UBS, Credit Suisse First Boston, JP Morgan and Citigroup's investment banking arm, as well as Interactive Brokers Group, a privately held company that is the parent of Interactive Brokers, a brokerage firm based in Connecticut. The volume of options traded in the US has recovered in the last nine months as US stock markets have rebounded. According to the Options Industry Council, equity options volume on the five existing US exchanges was 16 per cent higher last year compared to the previous year. The five are the Chicago Board Options Exchange, the ISE, the Philadelphia Stock Exchange, the American Stock Exchange and the San Francisco-based Pacific Exchange.

To: TFF who wrote (11119)	1/15/2004 4:01:13 PM
From: Ira Player	Read Replies (1) \| Respond to of 12617

Why are they building the model as nickel quote, penny execution? When all exchanges 'upgrade' to that model, you still may not get best national price. You may want to sell and ask for price improvement. It goes to BOX, where the bid is the same as national best, $3.00 and someone has $3.01 for price improvement. Someone at CBOE could have the same 3.00 bid, but allow 3.02 for price improvement. Why is this model superior to going to penny increments? Ira ps: Also, any opinions on when customer bids / asks will be required to be represented as they are in equities? I'm so tired of seeing bid / ask at 3.00/3.10 and I submit a sell at 3.05 and it sits there while there are continued prints at 3.10 and the bid / ask never moves.