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Thursday, January 28, 2010

Equity Technical Update #2010 - 2
Update to NASDAQ Routing Strategies Effective February 1, 2010, Pending Filing with the SEC

Markets Impacted:

  • The NASDAQ Stock Market

Contact Information:

What you need to know:

  • SAVE, a NASDAQ routing strategy designed to provide cost-saving benefits for customers, will be available effective Monday, February 1, 2010, pending effectiveness of relevant filings with the SEC.
  • Specifications have been updated on the NASDAQ OMX Trader website.

What is the SAVE routing strategy?

SAVE is a routing strategy for The NASDAQ Stock Market® that is designed to provide cost-saving benefits for customers. SAVE will first attempt to execute on NASDAQ OMX BXSM (BXSM), a low-cost venue for trading all U.S. equities. If unexecuted on BX, the order will check the NASDAQ® book and then route to other protected quotes and additional destinations, including the New York Stock Exchange (NYSE) in the case of Tape A securities.

Why is NASDAQ adding this functionality?

NASDAQ recognizes the need for efficient, low-cost trading of U.S. equities. SAVE is an innovative routing strategy that can provide customers with inexpensive executions.

Can I trade all U.S. equities using this new strategy?

Yes. Tape A, Tape B and Tape C securities will route to all protected quotes and additional destinations. For more information about the SAVE functionality, refer to the Order Types and Routing Strategy Reference Guide on the NASDAQ OMX Trader® website.

How will I know where the order executes?

The following liquidity codes will identify where your trade executes when you use the SAVE strategy:

Execution Venue Liquidity Code
BX B
NASDAQ Remove R
NYSE D
Other Venues X
NASDAQ Add A

What other routing strategies will be introduced?

Also effective February 1, 2010, NASDAQ will also introduce QSAV and QTFY. QSAV will follow the SAVE logic, but will check the NASDAQ book before routing to other destinations. QTFY will follow the Thrifty (TFTY) strategy logic, but will check the NASDAQ book before routing to other markets.

Have specifications been updated?

Yes, the updated specification documents have been posted on the NASDAQ OMX Trader website.

Where can I find additional information?


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