US electronic stock market Nasdaq says it plans to launch an equity and index options market in 2007 in a move that will pitch it against arch-rival Nyse which introduced its new options trading platform in August.
Chris Concannon, EVP, Nasdaq, says the new options market - which is expected to launch in the third quarter of 2007 - will utilise the equities trading system acquired when the exchange bought out the Inet ECN last year.
Concannon says the options market is on the verge of a transformative change, driven by the SEC's call for quotes in increments of pennies versus nickels.
"The move to decimalisation will shift the competitive landscape toward market platforms that are equipped to handle extremely high volume with an equally high level of efficiency," adds Concannon.
He says Nasdaq plans to operate a fully automated, price/time priority market with an opportunity for price improvement that provides a level playing field to all participants.
Nasdaq entered the options market in April 2006 by providing customers with connectivity and order routing to options exchanges. It says it will continue to offer routing to competing exchanges through its options trading platform.
Nyse said in August that the SEC had approved its plan to launch a new automated options trading platform.
The Nyse Arca Options platform, which replaced the exchange's PCX Plus options system, offers electronic order execution in all of the nearly 2000 options issues currently traded on Nyse Arca.