Initially the platform will deal with just five issues, but another 100 are expected to come online in a week. By December 2, all 4,108 NASDAQ-listed securities are expected to be trading on the system.
After checking the platform Saturday with 47 trading companies — and testing it since July with more than 30 dummy issues — the nation’s second-largest stock market will flip the switch for what it insists will be “an unparalleled view into the activity of the NASDAQ market,” according to its Web site.
SuperMontage is both a trading-order display and execution engine. Its technology will offer the fullest look-see available to brokers and traders about the depth of the market and the level of liquidity in the marketplace, according to NASDAQ. The system, which cost some $107 million, can automatically execute orders of up to 999,999 shares and represents a huge step for NASDAQ in what it can collect and how it displays that information (see Nasdaq Unveils SuperMontage Pricing Plan ).
With SuperMontage, NASDAQ can gather multiple quotes and orders from each market participant on each stock and then turn around and hand that to individual investors, according to CBSMarketWatch. However, in what is likely to be the greatest benefit for institutional investors, the platform will offer a series of new services for price levels and order sizes that will act like a magnifying glass on the fluid workings of the stock market.
The basic service of the highest bid to buy and offer to sell will be augmented with four others that will include aggregate best bid and offer as well as one that carries the top five price levels, helping highlight a stock price’s direction. A new “super” service, called TotalView, will add listings of the market makers, as well as the size of quotes and orders, in addition to the basic service components.
By NASDAQ’s thinking, the combination of transparency and depth of data on one central order display will help large investors understand how many shares they can trade on NASDAQ without substantially moving the price.
NASDAQ has been pressing this idea since 1999 to halt flight to alternative trading venues, but kept coming up against ECNs, electronic communication networks, which electronically match stock buyers and sellers. Late last August, the Securities and Exchange Commission finally gave its final regulatory nod to NASDAQ (see SuperMontage Gets SEC Greenlight ).
However, the SEC required NASDAQ to build an alternative display facility (ADF) to give market participants the choice of displaying quotes and reporting trades without being part of SuperMontage. The ADF does not execute orders.
The SEC ordered ECNS to either link to SuperMontage or certify — in writing — that they would use the ADF as their primary point of access to the NASDAQ Stock Market. Still, ECNs were able to hold off a September launch date until now with petitions.
The five companies that will kick off SuperMontage are:
- WVS Financial
- Willamette Valley Vineyards
- Waste Industries USA
- Excel Technology
- Yardville National Bancorp
Twelve more stocks will be added on Thursday and another 88 on October 21. Stocks will be added based on their alphabetical position every Monday after that until December 2.