PCX Plus is both a new technology platform and a new market structure for the PCX, designed to better serve existing market participants and attract additional liquidity to the Exchange. It will support the Exchange's San Francisco options floor, augmenting the existing electronic trading system, POETS. It will create a hybrid marketplace, providing firms and traders the ability to make markets from the floor or remote locations. Order flow firms' connections to the PCX will remain as they are, however, their customers will benefit from deeper markets created by the addition of liquidity from multiple competing market makers on and off the floor.
"We are expanding the concept of an exchange," said Philip D. DeFeo, PCX Chairman and CEO. "A traditional trading floor has served us well for more than 25 years, and is the foundation of the marketplace we are building. Now we are moving toward a model that provides broader opportunities to liquidity providers, allowing them access to our markets through new avenues. We are decentralizing access to the market, opening it to a greater number of participants who can add depth and liquidity to every issue we trade. We are combining the benefits of remote electronic access with the flexibility of an open-outcry trading crowd. We believe PCX Plus will provide the best price discovery in the country."
PCX Plus will allow market makers the flexibility to choose the issues they trade electronically. Trade allocation models will reward both floor and remote market makers who make aggressive, liquid markets, thus encouraging price improvement on all orders.
PCX Plus is subject to approval by the Securities and Exchange Commission, which the Exchange hopes to obtain later this year.
