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To: Peter V who wrote (12553)	1/13/1998 5:06:00 PM
From: BlueCrab	Read Replies (1) \| Respond to of 25960

Billy, Peter -- Was that a photolitho finish?<G>

To: Peter V who wrote (12553)	1/13/1998 5:07:00 PM
From: BillyG	Read Replies (1) \| Respond to of 25960

Got me! How about the proposed new NASD trading system (the MM buster).......... Tuesday January 13, 4:10 pm Eastern Time NASD proposes adopting Optimark trading system NEW YORK, Jan 13 (Reuters) - The National Association of Securities Dealers Inc said Tuesday it has proposed allowing members to trade on a new electronic matching system, OptiMark, which would be available on all Nasdaq trading screens. The system could be in place by the end of the year, NASD officials said, provided it gets the green light from the Securities and Exchange Commission and NASD members. ''We don't believe we have significant regulatory hurdles to overcome,'' said Al Berkeley, president of the Nasdaq Stock Market, although the proposal would need member discussion. OptiMark has already been approved by the U.S. Securities and Exchange Commission on the Pacific Stock Exchange, although it is not yet in use. OptiMark's ''black box'' system allows anonymous trades of large blocks of stock. Often, when one trader is trying to buy or sell a very large block of shares, other traders can take advantage by driving up or down the price, much to the frustration of the first trader. The effect is called ''market impact'' and can cost millions. ''It's a big dilemma. The moment you contact a market maker, you've broadcast your trading interest to someone in the market, and it can really impact price,'' said Holly Stark, a senior vice president at Dalton Greiner Hartman & Maher, a New York money management firm. She sits on the quality of markets committee at Nasdaq. OptiMark allows a trader to put in a bid or an offer anonymously, which would only become known when matches are made. It also has a price optimization feature, reaching the best price for both buyer and seller using mathematical algorithms, OptiMark said. OptiMark was founded by William Lupien, formerly chief executive of Instinet. Reuters Holdings Plc (quote from Yahoo! UK & Ireland: RTR.L) bought Instinet in early 1987. As part of the Optimark deal, Nasdaq will take an ownership position in OptiMark through a warrant deal. But officials said they were not releasing specific terms of the deal. Dow Jones & Co (NYSE:DJ - news) already owns a stake in OptiMark. ''While most ECNs are private systems with separate terminals, every Nasdaq terminal will have access to OptiMark,'' Berkeley said at a press briefing at the Nasdaq Marketsite. But he said OptiMark is not trying to displace separate ECNs. ''We continue to expect those to be an important part of our market as time moves on.'' Instinet is a broker/dealer system while OptiMark only matches trades, a Nasdaq spokesman said. Currently, trading on other systems represents about 17 percent of Nasdaq volume. Some Nasdaq traders have criticicized the system, saying that because insitutional market makers make profits on a principal transaction basis, OptiMark could cut into those profits. ''It could,'' said Stark. ''But if I am finding the natural other side of the trade, it will cost me less to transact. So I think ultimately will benefit performance.''