Primex trading up 60% with Nasdaq-100

New York: The Nasdaq Stock Market (www.nasdaq.com) has announced that the average daily share volume on the Primex Auction System (www.primextrading.com) jumped 60 per cent to more than 5.8 million shares in the one month period beginning 22 January, when the remaining components of the Nasdaq-100 Index were added to the list of securities eligible to trade on Primex.

The increase is compared with the previous month's average of 3.5 million, when trading included stocks in the Dow Jones Industrial Average and the Standard and Poor's 100 Index. Two components of the Nasdaq-100 Index — Microsoft Corporation and Intel Corporation — are also components of the Dow Jones Industrial Average. A total of seven Nasdaq companies are also members of the Standard and Poor's 100 Index.

"With the addition of the remaining Nasdaq-100 stocks, almost 24,000 customer orders are now being routed through the Primex Auction each day," says Nasdaq Stock Market senior vice-president Gene Lopez. "Broker/dealers continue to integrate Primex into their trading systems, setting the stage for future volume increases. In the meantime, Primex continues to function beyond expectations."

Nasdaq began operation of Primex in December, trading the 30 stocks of the Dow Jones Industrial Average. In January, Nasdaq added the stocks in the Standard & Poor's 100 Index. The addition of the remaining Nasdaq-100 stocks completed the list of stocks that are eligible to trade in Primex's initial start-up phase, which ends on 29 March.

One trading day later, on 1 April, all Nasdaq stocks and all securities listed on the New York Stock Exchange and the American Stock Exchange will be eligible for trading on Primex. Nasdaq has waived all fees associated with linking to, and transacting in, Primex for the duration of the initial start-up phase.

"Primex's fast start has shown the efficacy of integrating an electronic auction process into Nasdaq's fast-paced market," says Glen Shipway, chief executive of Primex Trading NA, LLC, the developer of the system. "Our system has lived up to its pre-launch billing: it provides greater levels of order exposure for the retail customer, increases interaction between Nasdaq participants, and provides opportunities to trade at better prices — all without the delays associated with traditional and manual auction markets."

Primex provides an easy way for Nasdaq market 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, who 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 and offer (NBBO).

In order to speed the auction process, participants in the crowd typically 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 immediately respond to them, allowing instantaneous executions, while still providing price-improvement opportunities.

Market-makers who 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. So far, more than 60 broker/dealers have registered as Primex Auction System participants.

About Primex Trading NA, LLC
The Primex Auction is the creation of Primex Trading NA, LLC, a partnership formed by leading 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.