The Big Board Expands Access To Electronic Trading

More orders will be handled electronically rather than by specialists on the trading floor.
The New York Stock Exchange on Thursday approved a rule permitting expanded access to its electronic trading system, Direct Plus. The move, which was expected, allows customers to enter buy and sell orders through the system as often as they like; previously, they were restricted to one order every 30 seconds. It also lets the system handle orders of any size; previously, it was restricted to a maximum order size of 1,099 shares.

John Thain, the Big Board's CEO, is pushing to modernize its technology to enable it to compete with Nasdaq, Archipelago, and other electronic exchanges, which account for 20% of volume in NYSE-listed stocks. "Our goal is to continue offering the best price as well as the most compelling array of order execution choices," he said in a statement.

Removing the restrictions will cause a higher percentage of orders, including institutional orders, to be handled electronically instead of by specialists on the trading floor. Jodi Burns, an analyst with Celent Communications, which tracks financial-services technology, says specialists will continue to play an important role in the handling of large orders.

Editor's Choice
Brian T. Horowitz, Contributing Reporter
Samuel Greengard, Contributing Reporter
Nathan Eddy, Freelance Writer
Brandon Taylor, Digital Editorial Program Manager
Jessica Davis, Senior Editor
Cynthia Harvey, Freelance Journalist, InformationWeek
Sara Peters, Editor-in-Chief, InformationWeek / Network Computing