Forefront Communications

Traders Magazine: NYSE American Marketplace Launches

Mark Dowd

Mark Dowd

Three, two, one. Liftoff – and the market has started.

The New York Stock Exchange officially opened its NYSE American exchange on Monday, July 24th. The exchange was formerly known as the NYSE MKT Exchange. The marquee feature of the new and rebranded American will be its 350-microsecond delay upon order entry, proprietary data and outbound routing. The market also will offer a Discretionary Pegged Order.

Rival exchange IEX already incorporates a similar type delay mechanism and CHX is planning to do the same.

In looking at NYSE American, Jonathan Clark, CEO of the buy-sideonly ATS Luminex, started by firms such as Fidelity, Black Rock and State Street, told Traders Magazine in an interview that he welcomed the new marketplace but it could take time for the buy-side, via its brokers, to connect and use the new exchange as well as measure its success.

“I was on the buy-side for 25 years – as a trader, managing desks – and I understand the knee-jerk reaction that some could have from a fragmentation point of view,” Clark began. “But this is a unique opportunity for innovation to solve a market problem. It’s interesting that NYSE was so skeptical of the IEX delay feature and has now come around to have their own latency model.”

It’s a case of ‘if you can’t beat them, join them’ mentality.

Clark added that this new market model – American – and other market-based solutions, rather than government mandated fixes, are best for the equities markets.

“The NYSE can now use one of its own exchanges as an incubator to test this solution,” Clark added. “The market will ultimately determine the success or failure of each, but they are technology-driven solutions to the challenges investors face – like Luminex itself was – which is a sign of a healthy market.”

But traders and market observers shouldn’t expect an instant and measurable indicator of NYSE American’s validity or performance.

“And we’re not talking about viewing stats at the end of the day, week or in a month,” Clark said. “I’m excited to see what happens, but it will take some time to see how the solution plays itself out.”

Read the full article here.

Leave a comment

Your email address will not be published. Required fields are marked *