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Strategies & Market Trends : Canadian Options -- Ignore unavailable to you. Want to Upgrade?

To: David Carlson who wrote (1321)	2/3/1999 4:46:00 PM
From: David Carlson	Respond to of 1598

So - a 'call market' has nothing to do with puts/calls... Sorry for the misqueue. TSE has issued another release with Q&A about the new "call market". It just seems to be a new trading system - nothing to do with options. I thought they had spent a fortune on Torex.... TORONTO STOCK EXCHANGE - TSE/OPTIMARK CALL MARKET - QUESTIONS AND ANSWERS Questions and Answers 1. Why is the TSE considering introduction of a call market? Continuous markets started as call markets. Originally, call markets set specific times at which buyers and sellers would physically come together, when an auctioneer would "call" out prices to facilitate trades. Today, a call market incorporates the traditional call market benefits, but facilitates trading using advanced technology. As a result, the number of participants is not limited to those who can fit in a room or on a trading floor. The TSE has a continued commitment to meet the needs of its constituents, including institutional "buy-side" customers. Those institutions are demanding greater liquidity, combined with pre-trade anonymity. Today's call markets accumulate liquidity anonymously and match orders while offering an efficient market that is fair, liquid and accessible to all market participants. 2. What is the OptiMark call market? OptiMark enables traders to fully express their trading strategies, and keeps details of each strategy completely confidential, in order to avoid consequences associated with leakage of trading information into the market. OptiMark's system determines the optimal trade price for each set of buyers and sellers in the call market, in a fair manner, ensuring consistent application of trading rules across all parties. The OptiMark call market is designed to integrate with existing market structures and practices, combining all public trading intent into a larger, more attractive pool of liquidity. It will be fully integrated with the TSE's public auction market at pre-specified times. The result will be a fair, more efficient and liquid market for all. 3. What benefits will the OptiMark call market provide to the Canadian capital market? The OptiMark call market will: * integrate trading intent from all constituencies into a more liquid market, * attract additional liquidity that would otherwise be withheld, * discover the optimal trade price, taking into account the full intent of all participants, * level the playing field for everyone, regardless of their role, size or style, * provide Canadian dealers, issuers and investors the same opportunities as their U.S. counterparts, and * generally increase the efficiency of trading. 4. Who specifically would benefit from the introduction of the OptiMark call market? The primary beneficiaries are institutional clients and brokers, but such a change would also benefit the market as a whole by: * providing a market in which institutional investors can comfortably commit and find liquidity, * significantly diminishing costs to investors caused by trading intentions being leaked, resulting in improved returns for Pension Plan and RSP fund holders, * maximizing trading volume, improving the service offered to issuers and investors, * diminishing the capital risk associated with liquidity provision, and * providing opportunities for retail orders to interact with institutional intent, to the benefit of both. 5. What's the role for dealers in the OptiMark call market? There will be a strong role for dealers in the OptiMark call market - one that does not compromise the anonymity and confidentiality of that market. Dealers will have full access to OptiMark, both to serve their customers and for their proprietary trading. Dealers will continue to represent all orders in the call market, providing credit ring integrity and clearing services, and continue to be rewarded by the payment of commissions from investors. Many dealers are developing additional strategies to capitalize on their unique strengths in this improved market. 6. Why did the TSE select OptiMark as its partner? The TSE investigated a number of call market structure alternatives over the past 2 years. We believe that an OptiMark call market represents a unique and compelling combination of all the attributes our constituents are requesting, and is the partner best positioned to maximize the efficiency, liquidity and competitiveness of the TSE market. This agreement is consistent with other alliances we are pursuing with world-class industry specialists in order to deliver best value for TSE customers. A recent example of this strategy was the forming of a relationship with S&P to launch the new S&P/TSE 60 Index. 7. What is the current status of OptiMark's relationship with the TSE? The TSE and OptiMark have entered into an agreement in principle. We are negotiating detailed agreements to address all aspects of our joint venture. We are watching with interest the implementation of OptiMark systems in U.S. equities markets. 8. Is the OptiMark call market system operating anywhere? The system has begun to "ramp up" live trading of all US listed equities on the Pacific Exchange. NASDAQ also intends to implement the OptiMark call market later this year, as does the Osaka Exchange in the year 2000. 9. Has OptiMark opened a Canadian office? OptiMark Trading Systems Canada Inc. opened an office in Toronto in mid-1998. This office is staffed with Canadians with previous experience in OptiMark's US implementation, who have been assigned to support the implementation and use of OptiMark in Canada. --30-- Steve Kee Manager, Media Services Marketing and Communications The Toronto Stock Exchange - tse.com 416.947.4682 -- office # 416.574.7500 -- cellular # 416.375.8856 -- page #