New York Stock Exchange
will push deeper into the electronic trading world early next year, when it begins offering real-time stock quotes on its Web site and automatic electronic order executions for brokers, Chairman
By the second quarter, investors also will be able to follow a stock electronically as it moves through the
trading floor and glimpse into the limit-order book -- where bids for stock are recorded but which is currently off limits to most individual investors.
"What we're trying to do is create a portfolio of execution choices for our customers," said Grasso, detailing the new systems from a 9,000-square-foot trading floor the exchange plans to put into use by December.
"When you stack all of these initiatives end to end, you find that we have become a very different New York Stock Exchange," he said.
But also one still clearly based heavily on traditional floor transactions involving specialists, who manage the auction of securities on the trading floor, and brokers gathered around posts to execute trades, Grasso said. He called the new trading floor at 30 Broad St., next door to the building that houses the exchange's main trading floor, "a very important living laboratory for what we want to do."
The new systems to come online next year, which the NYSE calls Network NYSE, include an automatic execution system for limit orders up to 1,099 shares, and a separate institutional system to execute orders in volumes of 25,000 shares or more.
The real-time quotes, in place of quotes now delayed by 20 minutes, and 3-D images of the trading floor will be available on the NYSE
Web site by the first quarter.
The NYSE announced the package of electronic trading systems earlier this year, when there was far more talk of a threat to the Big Board's traditional floor trading system by electronic communications systems, or ECNs, which are alternative trading systems. At least one of those,
Island, welcomed the changes the exchange has planned, but said their significance is unclear.
For example, the effectiveness of automating executions will depend on how much control specialist firms retain over those trades, said Chris Concannon, Island's vice president and associate general counsel. As for the planned 3-D viewing of stock movements on the trading floor, that may have little real value for investors, Concannon said.
"It's really cool. But then you see it and say, 'So what?'" he said. "It's cool -- once."