The spring 2008 pricing war between NYSE Arca and Nasdaq is raging as both markets battle for market share in New York Stock Exchange-listed and Nasdaq-listed securities. On Tuesday, a week after Nasdaq OMX overhauled Nasdaq’s transaction pricing in equities, NYSE Euronext hit back by taking the competition to non-displayed, or “dark,” order types.

A day later, the much-smaller ISE Stock Exchange changed its transaction charges for orders that execute at the NBBO midpoint in the exchange’s MidPoint Match dark pool. Nasdaq’s, Arca’s and the ISE’s new pricing go into effect May 1.

Arca’s new pricing change follows on the heels of successful transaction pricing changes the exchange implemented on April 1 to increase its market share in NYSE and Nasdaq names, respectively called Tape A and Tape C. Its share of trading in Tapes A and C increased in the first 18 days of this month, but the percentage-point gain in Nasdaq stocks was greater, according to investment advisory firm Equity Research Desk. The latest changes are “a further enhancement of our earlier pricing changes for Tape A,” said Colin Clark, vice president in charge of strategic market analysis at NYSE Euronext.

Arca, for the first time, will give customers a rebate for posting non-displayed NBBO-midpoint orders in Tape A names on its market. “We’ve been contemplating offering a rebate on [our midpoint-peg orders] for some time, and we thought now was a good time to do it,” Clark said. He added that volume executed through Arca’s midpoint-peg order type, which was introduced to participants in July 2007, “has grown significantly month over month since inception.” Previously, Arca had a similar order type for dealers only.

Arca’s pricing for these hidden orders is a carbon copy of Nasdaq’s recently announced new pricing for non-displayed orders. However, Nasdaq’s pricing applies to all NMS securities and not just those listed on the NYSE. [more]


Quelle/ Source: 2008 Traders Magazin