Nasdaq Needs Tech Help to Meet Decimal Deadlinegreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Nasdaq Needs Tech Help to Meet Decimal Deadline
Pop math quiz: What's the difference between 16/32 and 0.75? To the Nasdaq, it's 1 billion to 2 billion shares traded every day.That's how much Nasdaq officials think their volume will jump after they switch their index from fractions to decimals.
The Nasdaq's computers, which handle trading volumes of 2 billion a day, would crumple under the anticipated flood of new orders. New systems have been ordered, but they won't be ready until the first quarter of 2001, Nasdaq execs said Friday when they admitted they couldn't meet a July 3 switchover deadline set by the Securities and Exchange Commission. The SEC has not yet approved an extension.
The move is designed to make trading more understandable for the masses, which, presumably, will do more trading. "We expect to see an average of 3 billion to 4 billion trades per day, and the system that we have today cannot handle that volume," says Gregor Bailar, executive VP and CIO of the National Association of Securities Dealers, parent of the Nasdaq.
The new system, Super Montage, will resemble an online application and will replace the index's current SelectNet and small-order- entry trading system. The SEC has to approve the Super Montage system and its request for a deadline extension. Bailar says a response from the SEC is expected by the end of April. Revamping the trading system is a smart move by Nasdaq, says Rob Enderle, an analyst with Giga Information Group. "A chunk of the system is probably out of date and needs to be updated."
-- Tischelle George
-- Jen Bunker (firstname.lastname@example.org), April 03, 2000