NYSE Euronext today announced that its U.S. options market, NYSE Arca Options, submitted its report to the SEC detailing the results of the SEC’s industry-wide penny pilot program.
It said that the NYSE Arca and the options industry experienced a number of key market quality improvements for the 13 option classes trading in the pilot program. The analysis of the options penny pilot focused primarily on quote rates, data mitigation, effective and quoted spreads, available liquidity, and volume changes.
For all 13 pilot classes, there was an industry-wide net increase in average daily volume of 23.9%, or 283,562 contracts per day, during the pilot. This compares to a volume increase of 662,952 contracts, or 8.0% growth, for all equity options during that same period. Much of this can be attributed to across-the-board savings realized by the substantial reduction of 45% to 61% in the effective price spreads for all the penny pilot classes, it said.
NYSE Arca Options continued to attract more liquidity and investor participation, earning a 35% increase in its share of trading in the SEC penny pilot issues through May 31. NYSE Arca’s quote mitigation plan reduced average daily quote traffic by 13%, or 12.1 million quotes, which more than offset the increase in quoting in the penny classes, it said.
“We are very pleased with the initial results of the pilot program and the overall performance of the NYSE Arca Options platform. Since the SEC introduced the program on January 26, the investing public has seen considerable savings through the significantly tighter spreads,” said vice president, derivative products, Jon Werts, in a news release. “Our mitigation technology reduced the number of quotes we published in the inactive issues while allowing the industry’s most active products to be dynamically published in the most robust manner. We feel that the benefits to the retail customer have been clearly demonstrated and substantiate the need to expand the program.”
NYSE Arca Options reports substantial marketq quality gains during SEC penny pilot
NYSE Arca Options reports substantial marketq quality gains during SEC penny pilot
- By: James Langton
- June 5, 2007 June 5, 2007
- 09:10