Equity Trader Alert #2018 - 3 Nasdaq to Implement the Midpoint Extended Life Order

Discussion in 'Wall St. News' started by ajacobson, Jan 9, 2018.

  1. Kinda interesting.

    Subject to SEC approval, on March 12, 2018, The Nasdaq Stock Market (“Nasdaq”) will introduce the Midpoint Extended Life Order (M-ELO).

    M-ELO is a new order type that is designed to attract and unite counterparties with longer-term investment horizons. M-ELO orders will only execute against other M-ELO orders at the midpoint of the NBBO. For more information regarding M-ELO please click here.

    As announced in Equity Technical Update #2017 - 5, entering an M-ELO requires a new Cross Type code of “E” and a Display instruction of “M

    Cross Type / Cross Trade Flag (FIX) Explanation
    E Extended Life Order
    Nasdaq will also add a new liquidity code on all M-ELO executions.

    Liquidity Code Description
    n Midpoint Extended Life Order Execution
    Testing Opportunities
    Testing is currently available in the Nasdaq Testing Facility (NTF). Production testing will be available during the February 3 and March 10 UAT.
  2. tommcginnis



    Instead of a "Dark Pool",
    NASDAQ responds with a "More Light" Pool.....
    Good for them.

    I'll bet it gets business, too -- all of the higher price-elastic buyers+sellers, who don't mind an order hanging out a while.... Would be interesting to see when those Mello quotes are inside the NBBO, coincident with, or outside the NBBO. There's a few papers/research proposals to be had here.
  3. As a former Knicks fan I can tell you MELO won't execute with others and will cost more with no added benefit.
    tommcginnis likes this.
  4. i960


    Stratified liquidity is fucking stupid. Schemes like this only serve to break markets further then they already are.
  5. d08


    Midpoint pound-me-in-the-ass order.
    light12 and lawrence-lugar like this.
  6. tommcginnis


    I agree with your greater point, but I don't think it'd apply in this case -- no different than Mkt/Limit/Mid orders .....