Sunday, March 27, 2011

So much for the public

The ISE's detractors argued that order exposure was a hallmark of the options industry and that the QCC was in violation of that tenet.

For its part, the ISE argued there was little competition on exchange floors because electronic trading and penny increments have taken many traders off the floors in recent years. Also, exchange rules do not permit their off-board members to participate in floor trades. So, in practice, exposure on floors is nonexistent, the ISE asserted, and its QCC does not represent radical change.

SEC data belies that argument. A study undertaken by the regulator last year showed that about three-quarters of all trades of more than 500 contracts at the Chicago Board Options Exchange were broken up. Another 71 percent of all large trades at the Nasdaq PHLX were broken up.


Who needs data! We have history on our side.

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