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BOX Newsletter 8, June 28, 2004


 
 

BOX Sets Multiple Records, First Trading Session Over 100,000 Contracts

BOX completed its most active week yet on Friday, June 25, 2004 with the following records being established:
Trading Volume Records
  • most contracts traded in a single session: three of the past six trading sessions have set new BOX records for daily trading volume, including the first session topping 100,000 contracts:
    • June 18: 79,928 contracts
    • June 21: 84,997 contracts
    • June 23: 111,897 contracts

  • most contracts traded on a single class: BOX established two new records for the most contracts traded on a single class during a trading session:

    • June 21: 18,017 MSFT contracts
    • June 23: 19,908 QQQ contracts

New Price Improvement ("PIP") Records
  • largest PIP trade: 5,000 contracts were executed June 18, 2004 on a September QQQ Put with an improvement of $ 0.02 (two dollars per contract) over the prevailing NBBO offer of $0.55 for a total savings to the customer of $10,000
  • most PIPed contracts in a single session: 17,125 contracts were PIPed during the June 18 trading session
  • price improvement on executed PIPs continues to average slightly more than $ 0.02 per contract after nearly five months of trading; the total savings to investors since the BOX launch is nearly one million dollars
BOX Market Share for Week of June 25

The table below provides the national market share for BOX for the dozen most active classes on BOX during the week ending June 25,2004 with the average daily volume (ADV) for each.
Class
ADV
OCC %
Class
ADV
OCC %
QQQ
10,900
2.6%
YHOO
1,804
3.6%
MSFT
10,752
7.9%
SMH
1,704
4.4%
EBAY
2,719
7.2%
IBM
1,682
9.4%
QCOM
2,028
8.2%
BAC
1,369
8.9%

INTC
1,964
3.9%
GE
1,204
1.6%
CSCO
1,805
4.5%
AMZN
1,201
7.0%

BOX market share Information for each trading session is provided on the BOX website. The BOX website also provides daily statistics for overall trading volume and price improvement results.

Market Maker Roll Out Completed

The last BOX market maker appointments assigned at the allocation lottery in November, 2003 went into production on the BOX trading engine on the morning of June 28, 2004, completing BOX's initial rollout less than five months after the launch. There are presently 233 classes trading on BOX with an average of between thirteen and fourteen market makers per class.

An additional seventeen options classes will be added in mid-July 2004, bringing the total to 250 classes. Click here to view the existing classes trading on BOX or to obtain the list of new classes to start trading in July 2004.

 

Boston Options Exchange
Highlights & Advantages

Fully Automated - Fully electronic equity options exchange.

  

Low Entry Costs - No seats to buy or rent.

Price and Time Priority - orders will be handled on a strict price/time priority without a specialist controlling the price. There is no wheel for "allocating" trades that disincents competition.

 

  

Price Improvement Auctions – BOX includes a unique electronic mini-auction that will attract, subject to price improvement, orders that would otherwise be printed elsewhere at the NBBO.

 

Multiple, Competing Market Makers - BOX places no limits on the number of market makers who may continuously quote on a given options class. They compete equally on a price and time basis.

 

  

Anonymous - BOX does not provide information on broker identification when an order is displayed in the order book. Furthermore, BOX does not provide counterparty identification for trade executions. This anonymity encourages competition, rather than the "herd mentality" which discourages price competition at some exchanges.

 

Simple Cost Structure - traders only pay when they trade, there are no annual fees. No trade execution fees for public customer orders.


   Transparent - Order book broadcasting five best price limits allows traders to see market depth.
Open Architecture – Each trader may connect whatever trading system he wishes.
  

Equal Treatment of Orders - BOX does not discriminate order priority on the basis of the type of account. All orders on the BOX book are available to all traders on a first come, first served basis with no limitation on professional order executions.
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