-Spreads Tighten 45-61% Industry Wide in All Pilot Issues-
NYSE Arca Options Reports Substantial Market Quality Gains During SEC Penny Pilot
-NYSE Arca Quote Mitigation Plan Saved Over 12 Million Quotes Daily-
New York, June 5, 2007 – NYSE Euronext (NYSE Euronext: NYX) today announced that its U.S. options market, NYSE Arca Options, submitted its report to the SEC detailing the success and benefits to the investing public of the SEC’s industry-wide penny pilot program. NYSE Arca and the options industry experienced a number of key market quality improvements with respect to the 13 option classes trading in the pilot program.
NYSE Arca’s analysis of the options penny pilot focused primarily on quote rates, data mitigation, effective and quoted spreads, available liquidity, and volume changes. 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, 2007. 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.
“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. “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.”
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.
Designed to maximize speed and capacity, NYSE Arca Options offers customers unique order types and the choice between an all electronic or a floor based execution in over 2,000 options issues. As a participant in the SEC’s penny pilot program, NYSE Arca Options introduced a unique pricing structure designed to reward those participants who provide liquidity and aggressive markets.
Please click here to view NYSE Arca’s complete review of the SEC Penny Pilot Program.
Learn more about NYSE Arca Options.
About NYSE Euronext
NYSE Euronext, a holding company created by the combination of NYSE Group, Inc. and Euronext N.V., commenced trading on April 4, 2007 . NYSE Euronext (NYSE Euronext: NYX) operates the world’s largest and most liquid exchange group and offers the most diverse array of financial products and services. NYSE Euronext, which brings together six cash equities exchanges in five countries and six derivatives exchanges in six countries, is a world leader for listings, trading in cash equities, equity and interest rate derivatives, bonds and the distribution of market data. Representing a combined $28.5 trillion/€21.5 trillion total market capitalization of listed companies and average daily trading value of approximately $123.4 billion/€92.4 billion (as of March 31, 2007), NYSE Euronext seeks to provide the highest standards of market quality and integrity, innovative products and services to investors, issuers, and all users of its markets.
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This press release may contain forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYSE Euronext’s plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYSE Euronext’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYSE Euronext’s results to differ materially from current expectations include, but are not limited to: NYSE Euronext’s ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk and U.S. and global competition, and other factors detailed in NYSE Euronext Registration Statement (document de base) filed with the French Autorité des Marchés Financiers (Registered on November 30, 2006 under No. 06-0184), 2006 Annual Report on Form 10-K, as amended, and other periodic reports filed with the U.S. Securities and Exchange Commission or the French Autorité des Marchés Financiers. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Euronext that the projections will prove to be correct. This press release speaks only as of this date. NYSE Euronext disclaims any duty to update the information herein.