BRUT/INET/Supermontage will soon be integrated into a new "Single Book" that will dominate trading in NASDAQ stocks with around 75% of the total volume traded. For NASDAQ stocks, will anyone still route their NASDAQ stock orders to ARCA after the NASDAQ Single Book inegration is complete, and why? http://www.nasdaqtrader.com/trader/tradingservices/integration.stm http://www.nasdaqtrader.com/trader/tradingservices/marketshare/monitor.pdf
good point..you can also expect to be routing out much less if you place it on NASDAQ when the Single book is up and running, coz the majority of orders will be on NASDAQ not ARCA.
I dont trade nasdaq hardly ever so i may be wrong, but doesnt ARCA not follow the uptick rule? If this is true, will the fills not be better on ARCA because traders will be looking to short non-sho stocks on ARCA, and other traders will want the quicker fills on the bid due to said short sellers?
I was about to ask the same question.Won't the symbol be isld for the combined?Also will they have a market order like arca.Many direct access firms don't have market island keys and islands awful for shorting when a naz stock is falling. CHEERS
As far as I know ARCA doesnt follow the uptick rule, and they pay a similar rebate than ISB or BRUT... so there should be no reason not to use it. It probably wont have as much volume as NASDAQ but it will still have a lot more volume than DATA or TRAC...
Thanks for all replies...what we're trying to compare here is NASDAQ vs ARCA, after NASDAQ combines INET, BRUT and Supermontage into a single platform..Sure ARCA has higher volume than DATA or TRAC, but once NASDAQ creates its new platform, you're gonna have a situation where in many cases, 75% (?) or more of the volume will be on NASDAQ and most of the remainder (25% ?) on ARCA. Once this happens i think the incentive to route orders to NASDAQ will be much higher regardless of uptick rule considerations, because the bottom line will be that you will have a much greater chance of getting filled instantly on NASDAQ without getting routed out anywhere else. If ARCA allows shorting on a downtick, then that will certainly be where you want to go if you want to short on a downtick, but other than that, i dont see why you would route to ARCA anymore...All further comments welcome...
Once Nasdaq combines all these ECNs into NSDQ people will have just two primary order entry choices instead of four. Since a lot of people like spreading orders around to different ECNs, now they'll be forced to spread their volume primarily among NSDQ and ARCA. I'm wondering if there's a chance that ARCA could actually GAIN market share because of this.
Let´s say that most people turn away from ARCA as you suggest. In that case the queue in the arca book will go down dramatically, this in turn will create an incentive to use the ARB as the lines to get filled would be much shorter than those for the DOTN. This would cause the volume of both ecns to reach a new equilibrium where it takes a similar amount of time to stand in line on either ecn, just like it happens now. When one of the ecns starts getting faster queue´s than the other, then credit traders will add to the line on that ecn mking it an even choice again. The advantage of ARCA is that since it has a unique print on the TAS you can easily tell when a print went to someone in front of you in the line, unlike DOTN where the print might have gone to a market maker... I dont think that Arca is going to gain much market share from this merger, but I dont think it´s going to lose any either. However I could speculate that DATA, TRAC, ATTAIN, or a totally new ecn will probably gain some market share as the third participant... I think that the combined volume of INET+BRUT+SMON+etc would turn out to be a greater % of the total market volume than that of DOTN.