From Todd Wilemon: At NYSE Arca and Amex options exchanges, our goal is simple: we want to be the exchanges where the world trades options. Whether you want to trade on a price-time maker-taker exchange or on a traditional exchange with customer priority and pro rata allocation for market makers, we are striving through increased functionality and unique order types to make our exchanges your first destination. To make this happen, we are expanding the number and type of orders you can use on our exchanges.
Well without further ado, I give you our newest order type. Drum roll, please! Please put your hands together, off your seat and on your feet, ladies and gentlemen I give you the …”WAIT Order!” Please keep that applause coming and be sure to tip your waitress and bartender. You are going to love this order type. I dare say it might revolutionize how and where you trade options.
What is a “WAIT Order?” A WAIT Order will be processed one second after our matching engine receives the order. This means a WAIT Order will be held for one second before it will be processed for potential display, execution or routing. Why does this order type matter? The SEC requires that any order must be displayed for one second prior to being traded against by the same firm. The WAIT order guarantees that if a firm wants to facilitate customer order flow, they can enter a customer order and a WAIT order at the same time, and the customer order will be exposed for at least one second, giving everyone a chance to trade against it, prior to that customer order trading with a WAIT order.
WAIT orders must be limit orders; market orders do not qualify. Customer orders cannot be WAIT orders. Only Firms and Market Makers can use the new WAIT order. This makes sense because all customer-designated orders must be executed or displayed when received by the exchange.
WAIT orders can have different “time in force” TIF parameters. They can be day, GTC (good 'til cancelled), IOC (immediate or cancel) or FOK (fill or kill). They also can have different execution and display instructions. With the exception of the IOC time in force, WAIT orders can also interact with the AON (all or none) order book.
While WAIT orders can be canceled at any time, cancel/replace is not an option. If the option series halts or closes during the one second WAIT period, the WAIT order will cancel back to the sender.
The WAIT order type can help order sending firms interact and participate against their customers’ orders while ensuring that SEC requirements for exposure to the marketplace are upheld. Not only do our exchanges have the highest throughput and lowest latency, we now have unique order types to help increase your business.
We are always open to suggestions about functionality, new order types and other ways to improve. Ideas are always welcome. Enjoy your WAIT order, and check back soon for more news about innovative order types that are coming to NYSE Arca and NYSE Amex options.
Trade ‘em up!
TW.
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