Wall Street Letter VOL. XLVI, NO. 1 - January 2014 | Page 9

JANUARY 2014

volatility that comes with corporate
events and other announcements.
“There are people who trade offensively by taking advantage of upcoming volatility and trade on it, so they
need to know when it is coming,” said
Richman. “There are also defensive
models on where the disruptive nature of volatility causes prices bubble
up before, during, and after an event
so the offerings allow them to reduce
exposure to volatility.”
This data is collected by analysts
at WSH who reach out over 50,000
times throughout a quarter to collect
information that isn’t press released
and is either posted to a company
website, put through a wire service,
or is word of mouth that has to be
confirmed, according to Richman.
Garnering this data allowed WSH
to amass a large historical database
of financial information, which is
enticing to traders with quantitative,
algorithmic, and high-frequency
strategies, according to Richman.
“The logical next step for us was
to give this to our quant clients as
they take events and timestamps we
provide to gauge what the market did
in terms of pricing, volume, volatility,
and other events derived from this,”
said Richman.
EXCHANGES & ATSs

Phlx adds electronic
solicitation
mechanism
The Nasdaq OMX Phlx plans to
launch an electronic solicitation
mechanism to offer more
opportunities for price improvement
via auction, support volume and better
price large-sized orders, according to
its regulatory filing with the SEC.
The capability is one available at
other options exchanges, including
the Chicago Board Options Exchange, BOX Options Exchange and
the International Securities Exchange.
Orders eligible for the capabil-

TECHNOLOGY

Pacnet considers PEN for more Asian
countries, US

P

areas. He declined to commit to a rollout
acnet, an Asia-based provider of intedate for the new markets but noted that the
grated network services and data center platforms, is looking beyond the launch rollout is a focus for next year in addition
of its beta test period for its Pacnet Enabled to adding features and functionalities to
Network (PEN) service to consider making the PEN service.
Pacnet started looking at this type
the service available more broadly in Asia
of service as a possibility following an
and the US, according to comments from
upgrade of its cable system
Jim Fagen, president of
and out of a desire to push
managed services.
the envelope in terms of
The PEN offering is
provisioning capacity outdesigned using a networkside of a data center, Fagen
as-a-service model, such
explained.
that users, especially firms
“That is the reason cloud
in the financial services
computing is a hot topic;
vertical that were some
it’s the idea that you can
of the initial targets of
JIM FAGEN
burst and scale [capacity]
the offering, can provide
president of managed services, Pacnet
when you want and pay
bandwidth for low latency,
as you go,” he said. But
“cloud-ready” networks as
connectivity has not caught up, he said,
needed.
adding the process still typically takes 15
The beta and production release of
to 30 days and requires a one- or two-year
the service will only be enabled in a few
contract.
markets to start with when it rolls out in
With PEN, users can access the network
2014, Fagen noted, including Tokyo, Hong
to provision connectivity down to the
Kong, Singapore and Australia via Sydney
hour and have a concrete idea of the cost
and Melbourne.
for specific routes, he said. “So if customFagen said the next areas that Pacnet
ers want the fastest route, they can choose
expects to enable are the West Coast of
that, and there will be a premium but they
the US, as well as Korea and Taiwan as
Pacnet’s cable system already reaches those can see that right on the screen.”

ity must be at least 500 contracts in
size and they must include the limit
order and all-or-none designations,
the exchange said, and the initiating
member must include a stop price at
which the member would execute.
The agency order, submitted by the
initiating member, and the solicited
order that responds must be the same
size and the prices must either match
or cross, Phlx explained.
Agency orders can be solicited for
any participant except for specializes,
streaming or remote streaming quote
traders, and non-streaming registered
options traders, it added.

Once an order is submitted for a
solicitation auction, participants will
be notified via the Phlx orders data
feed and the specialized quote interface, the exchange stated. The auction
will last for one second maximum
but can be stopped earlier if the Phlx
Best Bid or Offer crosses the agency
order stop price or if the contracts are
subjected to a trading halt.
For order allocation, Phlx noted
if there is s Y