ROTs using the new system will be able to electronically improve the Philadelphia market using hand-held devices that are connected to AUTOM via an electronic interface. Price-improving market maker bids and offers will be effected by electronically sending orders to the Exchange's Electronic Limit Order Book. In order to use the system, ROTs' clearing firms will need to interface with AUTOM using an Application Program Interface (API) that has been developed by the Exchange. The PHLX believes that it is the first floor-based exchange to offer this type of system.
"This new system is another step in the process of evolving the PHLX Options Trading System into a more electronic market place. Providing an electronic means for market makers to post bids and offers will result in more competitive markets and deeper liquidity" said PHLX Chairman and CEO, Meyer "Sandy" Frucher.
In its order approving the system, the United States Securities and Exchange Commission stated: "The Commission believes that the proposed rule change, once fully implemented, should substantially enhance incentives to quote competitively by automating the process by which trading crowd participants can improve the disseminated quote and by ensuring that the price-improving ROT is rewarded with incoming order flow."
The Philadelphia Stock Exchange (PHLX) was founded in 1790. The PHLX trades more than 2,200 stocks, 1,016 listed equity options, 12 sectors index options and currency pairs. For more information about the PHLX and its products, visit www.phlx.com.
