Beginning today, the New York Stock Exchange will begin trading two stocks on its electronic trading system, The Wall Street Journal reports.
Whereas trades currently take an average of nine seconds to process on the current system, the new electronic platform will be able to do that in less than a second. And while the largest batch order that the system can now process is 1,099 shares, the new platform can handle an order up to one million shares—meaning that large orders will be done faster and at better prices.
The new system also lifts restrictions that previously hampered investors, limiting them to trading only twice a limit and requiring them to put price limits on orders.
Although the NYSE is scheduled to begin trading only two stocks on the new system today—American Express and Equity Office Properties Trust—by December, nearly all 2,700 NYSE listings will be up and running on the new system.
“The NYSE will be more attractive now. We expect we’ll do more trading there,” said Dan Mathisson, managing director of electronic trading at Credit Suisse Group.
The Securities and Exchange Commission will require all exchanges to offer electronic trading in 2007.
At the NYSE, floor brokers will continue to sell and buy orders with specialists, but the exchange is also offering them hand-held computers on which they can place electronic trades.
However, should a stock make a big move in a short period of time, NYSE will shut off the electronic capabilities for a few seconds so that specialists can reset the price.
Nonetheless, critics of electronic trading fear it will lower volume for floor brokers.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.