Nasdaq announced today that six more companies had agreed to dual listing. They are APA, CDN, SCH, CFC, HPQ and WAG, which is a pretty impressive list. Once this process gets started and gains legitimacy, it will be hard for companies to justify not having dual status. Apparently there is a lot of pressure from mutual funds to go dual. On many platforms that retail traders use, it is cheaper to trade through Island than go NYSE. It is not hard to envision a lot of the volume departing the NYSE. What will happen to the specialists? How will the data providers handle this? Will there be a consolidated Lev II or will we have to look at NYSE and Lev II?
Possibly a long time before it happens, but this is no doubt the beginning of the end of the Specialist System, as we know it today. Good riddance !
My level II alrady shows the ECNS on listed equities along with the exchanges, but I was expecting to see SIZE or individual market makers on these symbols today. I don't see any change in market participants. Is anyone seeing anything new on these symbols? Does anyone have a NASDAQ trading terminal system out there that can check?
I read an article on The Street.com that quoted various people as saying this would not amount to much unless the trade through rule was changed. That rule requires that trades be sent to the exchange with the best price. Specialists can penny the ecn's and block them. Three thoughts occur to me. One, that rule does not apply to direct access traders. We can go where we want. Two, if and when major nasdaq MM's enter for these dual-listed names, they may start to put real pressure on the specialists. Three, if ecn's become the route of choice, the spreads there will be tighter than specialists care to match, at least on heavily traded issues. Over time, I don't see the trade through rule being much of a problem. I'm interested to see how this works out.
Thanks for chiming in, folks. I was just going to post a thread asking folks what they thought of the dual listing. I'll be watching with interest as well. André
The quoted posting mentions increased activity from MMs and ECNs...providing significantly more pressure than before. Yet, it is not clear on what precludes MMs and ECNs from being able to trade these stocks without them being "dual listing".
http://www.msnbc.msn.com/id/4422316/ Well the SEC is more than a little miffed at the Nas folks over the idea of dual listing a Nas 100 stock. Seems the Nas is more than happy to dual list NYSE but not necessarily the other way around. Good luck and good trading. Bsulli