T~E - Rackcdn.com
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T~E - Rackcdn.com
T~E rI.DP~ER.qTD~E 131:T~E ~FITJI3~FIL ~FIFL~ET.gg.gTE~ INTERMARKET TRADING SYSTEM oooooQoeooooooooooooo eOOO,OQOOOOOOOOeOQOOOOOOOOOOQOOOeOOOOO iii •O••o•••••Q••••••••o••Q•••0•••U•••••••••o•o•••o•••••o••••o••••••••0•••••o•o••••O•• /TS-Rapidly Expanding In Competitive Issues The six participating market centers have increased the number of issues traded on the system from the original 11 in April 1978 to almost 640 currently. This growth will continue as approximately 40 issues per month are added to include the full 900 to 1,000 issues now competitively traded between two or more participants in the system. Growth in ITS Issues 800 700 631 600 5O4 500 362 40(] 300 i ! I 200 100 J 2nd Qtr. 1978 3rd Qtr. ooeo ooo eooo • e o o o o o o o e o o o o o o o o o o e o e o o o o o e o o e o o o o o e 4th Qtr. 1st Qtr. 1979 ',nd Qtr. 3rd Qtr. 4th Qtr. • • eo oooo • • go oooo • • ooo oooo o o o o o o e o o o o o o o o o o o o o o o o o o o o o o e o o o o e o o o l • o o ei" ITS-Over A Million Shares A Day And Growing -e The securities industry's confidence in ITS is reflected by the ever-increasing use of the system. In August 1978 six exchanges were linked by ITS and, in that month, trading volume reached 5.7 million shares. Twelve months later, monthly volume had grown to 22 million shares. The daily average ITS trading day is now just over one million shares and growing. In the same twelve months, the number of ITS trades per month rose from 8,000 to 37,000 and the system is still growing. When relating these figures to the much larger number of shares traded overall, it is important to bear in mind that ITS normally is used only when it appears that a better price is currently available in a competing market center. When prices are equal, a broker or market-maker will usually execute in the market in which he is physically present. The purpose of the system is not to shift trades at random from one market to another but assure that executions can take place at the best price currently available within the nationally linked network. Monthly ITS Trades and Volume AUG 79 37.0 40 35 30 25 // JAN 79 21.0 ...... Thousands ,~ 20 15 22.0 AUG 78 8.0 10 13.0 5 Volume' Millions AUG 78 5,7 0 AUG OCT 1978 DEC FEB • "" ""''::: . . . . . . : """ '" "'" .. !•7 o e o o e e o o o o i APR JUN 1979 ii:'i "" ii .... .... i'T"::;. e o o e e o o o o o v .:'" • .....:-.... .:. e o e o o o o o o e o e o o e o o o e e e e e o o o o o e e o • • • eoooooool el . ,.' . ah ~olot ~ro~rams alreadv~:. ~)~ ,/},.But~sibeedi~n!.not. '~:~ = ~." "- ~'.-'..~ .~ -=.'.. <..: ~':.,, . . . . ~ ,==-",'" ~ - " : " '-.'..,'~- ":<" "-7':.: ,-~ , - , ' * - " ~ , , :. "T...'. ,- '; • - ,. ,_4...~ , --. ,=.. • ~ , ~.L~ ;.~--~ : - , ; ..* ~ constralnedtoautomatlc computer matcNing~.>':.~<: -,':<',.'i.,." I, #~.,.,,. <;.~;:-~:;.>~:,:-. :,'<. ' o; ~ " ' .arenot ~, :': .-,~".""~".~.-~J.-.io~:."';~.'~ ':'~,'~'::: .,~ -'..,_ ,~.." ,.- acri f,iC,eto :the: I "~;."'~k'Z '. " . " ". " ' ;,. ,- .H'' '- .';" -, " .'" ~ ..... " ,.,. '.." :"~' : " . . --~~- " -~;'.J'~-'.'. ". -'.' " -:~ i" !47 ~/.: L::'-'~.:"< ,~"~"~, ,->~":"-, .- -:., ,-.'-'--'.~.,.-.":>*>~-.,:~ Average Response Time of Executed Commitments :~-);5.1 ~ '. g : ~ : ~ , ~ * ~, .'a~:.. '.-~. • ':.'SR ,,= ,,:. ; .~ ! : . : . . . . . . . . . d, ,~_, l :'"-f--.-'-'.~ 6( Seconds 5~ 5; 5 5.~ 54 5; "- , - - : ~ / A q , , ' ~ ' . . " i.:-> : " '~ 4", 4a 41 :": '-'<" ', 5 ' . ' : ? , ,./ ~'" . u-,* • '-'".. . -.c. ",', ~;>'1 "' L'-,. ,' ~ ," - 0~ ., ~I <'," • Z't v" OCT 1978 :!- :.:/-, .z ,,'. -' }ii,.• - ,...a: 1 . ' .-. ' , , .,.. • •' ' . - " , ' ' , r • ' , Ioooo,oooooooo, "" " ' ,,.. ~1 ""- ~ • • OI " " -, .," ~ APR ' ' • :°| ogle eo " . ' . . " , '. ,, " .:. JUN oo go . O0 to .|:** • oe~o|ooo • go l e o oo • • O O" *o oleo , '- - I • - Ooo ~ . + , . , ,', ~o O OJOOe • ,.. .8 . lie gee " , ,,.- " oo gee ooooooooeloeoooooeoeoeoooq~ooooooooooo.ooooooooooo ,, +."::" AUG - • e g o oo o l e• o , • • oo~e ,'o O i l • ""~ OOOO,: oo,~.'ooeoo.oo'ooooo v FEB 1979 o.., oqlp - DEC ~ .:. • 0 ii ',. , ITS-Links T h e National M a r k e t System Elements ITS provides brokers and market- makers with an electronic communications link for transmitting buy 4 sell commitments as well as administrative messagq to participating exchanges. Each commitment and message is verified by hard copy delivered within seconds of the transmission. ITS works in concert with each of the other NMS elements: The Consolidated Tape-- Trades in ITS are reporte on the Consolidated Tape by each participant. National Clearance and Settlement-- No additior clearing steps by brokers are required for ITS trades. Each broker throughout the country completes the post trading process through his own local clearing entity. The Composite Quote System--Adjunct to ITS ar an important factor in its success. It enables all interested parties to see the current quote and size ¢ each eligible stock in all participating markets nationwide. Limit Order Protection-- ITS offers greater II protection of public limit orders "at the market" than presently available. Plans for protection of limit order: "away from the market" are currently being developed. i .": .,' ". .' . . " " . . . . . . -.. . . . •".."" "" ii o tlli IIe ii ii o ! ii e " i ' .'."i. . i . •. . . . ", ,"'";. . . . ".."" "• " , . . i,.-': ". " " . . . . . . . eii I i iii e e e ! ir;2i, :..:.'" :." Ii e e • • oo • • • • • ee • • o e • • ii;:.], :o "-..'.:" -" • o e e e e o e e e e e ii'Hi e oe i! e e e ill e e : e e ... ill "".: -: ". 1 e e e o e Q o e e e ITS-A Dynamic, Expanding System Because of the prudent, evolutionary design of ITS, many enchancements based on experience have been made during the past year. More are planned the future. Those include: A Universal Template-- For greater efficiency, standardized display format for CRT screens will simplifyentry and responses to commitments as well as reduce turnaround time. increased Message Capability-- Software enhancement will provide ability for ITS expansio and increased traffic capacity in the 1980's. Names Later Capability-- For active issues, "g up" names on ITS trades may be supplied later in the trading day to provide faster executions. increased Availability of Quotation Montages More aid for brokers to view additional size at a b~ price when available in other market centers. Commitment Card Input and Response Capability--A pilot program to provide ITS capability for direct input and response via "marksense cards" rather than keyboard strokes. This i: improve system efficiency and speed. Limit Order Protection - - A new Limit Order Information System (LOIS) will build upon ITS in order to provide protection for limit orders "away from the market". ii ' " "• • • • • ::. ................................. """". >°o '""""" I:" 1 % o• "'": 0 ° ' "O 0 0 0 t h. O0 I O0 "t l'i"l l :"-'""" ' " " " = t h..i.i..= oo • Oil ,,,, • -,, IIO00 • • Ill ,I I, ,, ..:......:: O0 oo • OOO0000It • • O0 i • lh.... ..... • II • II .... •" " - " 000 O0 • Oi • .. ... • • ,.. ............................... ii , "'!~ o,, I'T':::i. I I '• O"O O O t i,,i.... II """ °°°i" oqo • "Ill.. ! , ITS-The Cornerstone Of The National Market System The IntermarketTrading System: stimulates stronger professional competition to handle public investors' orders. improves depth and liquidity in the public markets for listed stocks. preserves the key element of human judgment in pricing and trading listed stocks while facilitating the execution of transactions among widely separated marketplaces. assures low-cost enhancement of market-making in participating market centers. permits continuity of regulation and surveillance of market activity in listed stocks. avoids the inflexibility that would result from forcing all trading into a single, computerized mold. By building upon, refining and enhancing the timetested fundamental features of our exchange marketplaces, ITS allows all members in all participating markets to better serve their customers. Better service to the investing public, through a system that employs highly sophisticated electronic technology but at the same time is simple, practical and inexpensive, makes ITS the cornerstone of the emerging National Market System. oo ~oee ooo ooooeo • ooooooo • • • ... . . . . • • O0 • • • ~oo • • eooooooooooooooooooooo oo oeooooo ooo oo • • oe • ~oo o~ooo ooooooeeoooo, II li.~...z ~ • O0 ooo • oo oo~ooeoooo 9oo~o oo • oo ..... .. • • ooe oo~ • ooo ooo eeoeoooee • • oo@o • • oo oo • • • • .. . . . . z . . . . . , o~ • oo • • oo • • oo • oo ooooo • ooo • ooo • ooooooooooooooooooooooooooooooooo Z °°:°°o0°0 • ,,:,Oo,OO : ,otOOoOOO I E £E" i i i i £i" oo ooe s.z • • • • ~eooo • : ,o:OOoO.O ,%% "" :: For further information or if you have any questions about the Intermarket Trading System, please contact: American Stock Exchange James Neal Market Operations Division 86 Trinity Place New York, NY 10006 (212) 938-6386 Boston Stock Exchange Leon J. Bastien Marketing Department 53 State Street Boston. MA 02109 (617) 723-9500 Midwest Stock Exchange Michael Gasped Exchange Operations 120 South LaSalle Street Chicago, IL 60603 (312) 368-2404 New YorkStock Exchange Edmund Lukas Marketing Department 20 Broad Street New York, NY 10005 (212) 623-6876 Pacific Stock Exchange Howard E. Stubblefield Marketing Department 301 Pine Street San Francisco, CA 94104 (415) 393-4044 Philadelphia Stock Exchange Stephen Reed Marketing Department 17th .& Stock Exchange Place Philadelphia, PA 19103 (215) 563-4700 INTERMARKET TRADING SYSTEM , eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeoeeeeeeeeeeeeeeeeeoeeeeeeeeeeeeeeeeeee .,2 The Intermarket Trading SystemBuilding On Strength The Intermarket Trading System (ITS) was launched in April 1978 as a joint effort of the American, Boston, Midwest, New York, Pacific and Philadelphia Stock Exchanges. Since its inception, ITS has proven itself to be an efficient electronic communications linkage between market centers as called for by Congress in its mandate for a National Market System. But electronic efficiency was not the only consideration in developing ITS. Equally important was the determination to build upon the proven strengths and flexibilities of the exchange market systems while expanding the full and fair field of competition among investors' orders, among market- makers and among the market centers. The result is a system that weds computer age technology with human judgment-- a factor vital to the pricing and trading of securities for almost 200 years. Melding these two elements permits more effective and competitive utilization of capital for market making and facilitates the execution of investors' orders at the best price available. In short, ITS enables a broker or market- maker to reach into other markets m electronically-- within a matter of seconds, whenever a better price in a competitively traded issue may be available. : ' : | . o l ; ° " "o . ; o o o o o o l o o e e o o o o o o o o o oooeo e o o o o o oo ° ° ° • oo ooo oo o o ° ° go oo • oo ° ° ° oooo • • o o o o o o e e o o m o o o o o o o o ~ o o o e o o o o l o o o o o o o e o o o o o o o o o o