The Nasdaq Stock Market, Inc. (Nasdaq: NDAQ) today announced it will introduce the NASDAQ intraday cross, a fully-anonymous trade execution facility designed to facilitate the execution of large trades.
The intraday cross will provide market participants and investors with a highly efficient and accurate single price at specific times during the trading day, resulting in an enhanced ability to discover larger pools of liquidity. All U.S. securities will be included in the intraday cross.
NASDAQ is extending its success with its Opening and Closing Cross with the introduction of an intraday cross. For the month of September, average volume in the Opening Cross was 22.9 million shares, with 279 firms trading in the open. Average volume in the Closing Cross was 16.4 million shares, with 243 firms trading.
"The NASDAQ intraday cross will help institutional sized orders find liquidity anonymously and with greater efficiency," said NASDAQ Executive Vice President Chris Concannon. "Because this centralized order facility will provide greater liquidity, it will be easier to trade large blocks more quickly, while minimizing market impact and associated price movements."
Pending approval from the Securities and Exchange Commission, the intraday cross will be available in early 2006.
NASDAQ will begin operating multiple scheduled crosses during the trading day. The crosses will occur at approximately 11 a.m., 1 p.m., 3 p.m. and 5 p.m.
Executions in the intraday cross during regular trading hours will be done at the mid-point of the National Best Bid and Offer. Executions after hours will occur at the official closing price of the primary market. All executions will be anonymous.
NASDAQ also employs a facility that sets the primary opening price. The Opening Cross is a price discovery facility that crosses orders at a single opening price. Since the launch in October 2005, market makers and other industry professionals have repeatedly demonstrated their willingness and ability to offset imbalances that are entered into the Cross. The Cross generates an opening price that is widely used throughout the industry.
NASDAQ sets the primary closing price with the NASDAQ Closing Cross.
It is a price discovery facility that provides net asset values for mutual funds. It crosses orders at a single closing price - enabling market participants to execute on-close interest and provides unparalleled transparency. The Closing Cross generates a closing price that is widely used throughout the industry, including Russell Indexes, Standard & Poors, and Dow Jones.