The Pacific Exchange (PCX), created from the merger of electronic communications network Archipelago and the Pacific Stock Exchange, is offering broker-dealers, including specialists and market makers from competing exchanges, access to its automated execution systems in selected options issues.
Two PCX market makers - Wolverine Trading and Timber Hill - have agreed to provide automated executions for any broker-dealer order sent from another exchange or an upstairs firm.
As part of a pilot programme, broker-dealer orders in nine options issues will be eligible for Auto-Ex: Gillette (for up to 100 contracts); Nokia (100); Schlumberger (100); Exxon Mobil (100); Fannie Mae (75); Compaq (50); Intel (50); Hewlett-Packard (20); and Emulex (20).
Philip DeFeo, PCX chairman and CEO, says: "By giving these customers direct access to our automated execution system, their trades will be handled electronically, and executed faster, more often, and sometimes at better prices."
The SEC approved the proposal earlier this week. The Exchange hopes to add issues and other market makers to the pilot in due course.
The Pacific Exchange currently operates from a trading floor in San Francisco, but this will be closed when the merger is consummated in February. The electronic stock market will inherit 360 mainly secondary listings from the old Pacific Exchange.