This past March, the PCX applied its firm quote rule and AutoEx guarantees floorwide, and eliminated size distinctions between customer and broker-dealer orders. The POETS enhancements facilitate those policy changes. Maximum AutoEx sizes at the PCX, for example, can now be set series by series, rather than issue by issue, and market makers may disseminate asymmetrical quoted sizes.
The PCX now offers partial automated executions for orders routed through POETS, when the order exceeds the maximum size guaranteed for AutoEx. Previously, the entire order would route to a floor broker directly, as it exceeded the Exchange's maximum eligibility size for automated execution (up to 250 contracts for equity options; 2,000 for QQQ options).
Orders from broker-dealers and other professional traders are now eligible for automated execution in selected issues and series when the PCX market is locked with the national best bid and offer (NBBO). Eligible issues are determined by PCX Lead Market Makers.
"These enhancements to POETS pave the way for our new electronic trading system, PCX Plus," said Philip D. DeFeo, PCX Chairman and CEO. "We and our members are committed to making aggressive improvements to our existing business model, while PCX Plus is in development. We broke the distinction between customer and professional orders in selected issues with BD AutoEx, and then expanded it floorwide.
"Floor members asked for these technology changes, DeFeo said. "They wanted more flexibility and a broader opportunity to serve customer interests, and we're pleased to deliver these enhancements to them."
The POETS enhancements were developed over the past six weeks. They were implemented at the market opening this morning.
