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Norm,
The official "spin" is pretty much what one would expect in
terms of
meeting competition head on. I think there is a one day
delay in
posting to the web site .. so you'll be able to read the
release on
Wednesday.
We've expanded RAES to 20 up on everything as step one. The
PSE merger
has been restructured to avoid building a new facility,
which a good
number of folks in Chicago wanted to avoid.
Screen based trading, in general, will be a fact of life on
all
exchanges eventually. You only have to look to Europe to
see the
evolution that will probably occur here as well.
Hopefully more competition will mean, as it has meant
elsewhere, lower
costs, considerably more volume, and broaden investor
participation....the participation issue is key in options
because such
a small base exists.
As to who will take the other side, they will recruit a
number of MM
firms or simply internalize the order flow, the piece they
don't want
they ship to the existing exchanges. Same way stock is
traded on the
regional exchanges via the ITS system now.
This effort could probably be more successful than the
Cantor system for
futures because the customer base is somewhat broader.
There may also be another exchange entering the options area
as well.
The IS plan has been shopped around for a while... the real
question is
what will the Schwab's, Fidelity's and Brown's do .. as they
represent a
much bigger piece of the business. There is some thought
that a major
discounter will simply internalize the whole process, with
the exception
of index which they can't internalize as simply, and use a
large
investment bank(Goldman, J P Morgan or someone like that)who
wants all
of the contra party business.
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