Nasdaq expands primex trading
By Our Markets Bureau | 08 Jan 2002
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Mumbai: The Nasdaq Stock Market (www.nasdaqnews.com) has announced that it has expanded the list of securities eligible to trade on the Primex Auction System (PAS) to include all component stocks of the S&P 100 Index. The seven Nasdaq-listed securities now available to trade on PAS are: Intel, Microsoft, Cisco, Oracle, Amgen, Nextel, and MedImmune.
Nasdaq began operation of PAS on 17 December, with trading in the 30 stocks of the Dow Jones Industrial Average. Nasdaq plans to add Nasdaq-100 Index stocks later this month. Nasdaq has an exclusive license to operate PAS for all US equities. This new, hybrid, auction/dealer-trading system was developed by Primex Trading NA, LLC.
"PAS has performed up to our expectations," says Nasdaq Stock Market senior vice-president Gene Lopez: "Through last Friday, more than 100,000 trades and 28 million shares were executed in the system. More than 1 per cent of the Dow 30 volume consistently traded through Primex during that same period."
Says Primex Trading CEO Glen Shipway: "We are pleased that the initial launch is proceeding as planned and that subscribers are becoming comfortable using the system. As SunGard/BRASS, Lava Trading, and Nasdaq Tools connect their customers to Primex in coming weeks, we expect trading volumes to increase further."
PAS is a relatively simple and easy way for Nasdaq participants to access liquidity that, until now, has never been exposed to the marketplace. There are two sides to the Primex auction. On one side are order entrants, including Market Makers that briefly expose their orders in the system. On the other side, a crowd of electronically-linked participants competes for these orders at prices at, and within, the prevailing national best bid or offer (NBBO).
To speed the auction process, participants in the crowd typically will predefine their responses using the system’s unique predefined relative indication (PRI) tool. These responses reside in the system undisclosed. When orders are exposed in the system, PRIs respond to them immediately.
Market-makers that enter their customer orders in the system may commit capital to those orders, in conjunction with the auction process. The system’s exposure mechanism validates customers’ execution prices and enhances execution quality without sacrificing speed.
Later this month, Nasdaq will expand the securities eligible to trade in the system to include stocks in the Nasdaq-100 Index. These combined lists of almost 200 securities will remain in effect through 31 March 2002, when the initial start-up phase is scheduled to end. Nasdaq has waived all fees associated with linking to, and transacting in, PAS for the duration of the initial start-up phase.
So far, more than 60 broker/dealers have registered as PAS participants.
About Primex Trading NA, LLC
PAS is the creation of Primex Trading NA, LLC, a partnership formed by securities industry brokerage firms and investment banks, including Salomon Smith Barney, Morgan Stanley, Merrill Lynch, Goldman Sachs and Bernard L Madoff Investment Securities. The New York-based Primex Trading NA, LLC conceives, designs, and licenses trading solutions for the securities industry. For more information go to www.primextrading.com or contact Glen Shipway at glen.shipway@primextrading.com.
Nasdaq began operation of PAS on 17 December, with trading in the 30 stocks of the Dow Jones Industrial Average. Nasdaq plans to add Nasdaq-100 Index stocks later this month. Nasdaq has an exclusive license to operate PAS for all US equities. This new, hybrid, auction/dealer-trading system was developed by Primex Trading NA, LLC."PAS has performed up to our expectations," says Nasdaq Stock Market senior vice-president Gene Lopez: "Through last Friday, more than 100,000 trades and 28 million shares were executed in the system. More than 1 per cent of the Dow 30 volume consistently traded through Primex during that same period."
Says Primex Trading CEO Glen Shipway: "We are pleased that the initial launch is proceeding as planned and that subscribers are becoming comfortable using the system. As SunGard/BRASS, Lava Trading, and Nasdaq Tools connect their customers to Primex in coming weeks, we expect trading volumes to increase further."
PAS is a relatively simple and easy way for Nasdaq participants to access liquidity that, until now, has never been exposed to the marketplace. There are two sides to the Primex auction. On one side are order entrants, including Market Makers that briefly expose their orders in the system. On the other side, a crowd of electronically-linked participants competes for these orders at prices at, and within, the prevailing national best bid or offer (NBBO).
To speed the auction process, participants in the crowd typically will predefine their responses using the system’s unique predefined relative indication (PRI) tool. These responses reside in the system undisclosed. When orders are exposed in the system, PRIs respond to them immediately.
Market-makers that enter their customer orders in the system may commit capital to those orders, in conjunction with the auction process. The system’s exposure mechanism validates customers’ execution prices and enhances execution quality without sacrificing speed.
Later this month, Nasdaq will expand the securities eligible to trade in the system to include stocks in the Nasdaq-100 Index. These combined lists of almost 200 securities will remain in effect through 31 March 2002, when the initial start-up phase is scheduled to end. Nasdaq has waived all fees associated with linking to, and transacting in, PAS for the duration of the initial start-up phase.
So far, more than 60 broker/dealers have registered as PAS participants.
About Primex Trading NA, LLC
PAS is the creation of Primex Trading NA, LLC, a partnership formed by securities industry brokerage firms and investment banks, including Salomon Smith Barney, Morgan Stanley, Merrill Lynch, Goldman Sachs and Bernard L Madoff Investment Securities. The New York-based Primex Trading NA, LLC conceives, designs, and licenses trading solutions for the securities industry. For more information go to www.primextrading.com or contact Glen Shipway at glen.shipway@primextrading.com.
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