Upcoming Enhancements to Midpoint Peg order functionality on Nasdaq

Get ready for upcoming enhancements to the Midpoint Peg order functionality on Nasdaq! As announced in Equity Trader Alert #2024 – 3, Nasdaq will be introducing performance improvements to its Midpoint Peg order functionality starting on January 29, 2024. These enhancements will be rolled out over several weeks, and during this time, you may notice some differences in order handling behavior. Specifically, non-routable pegged orders will now be accepted and acknowledged at the customer entered limit price, and Nasdaq will be streamlining the valid FIX order entry methods for Midpoint Pegs. Stay tuned for these exciting changes that will optimize your trading experience on Nasdaq!

Enhancements to Midpoint Peg Order Functionality on Nasdaq

Introduction

Welcome to this comprehensive article on the enhancements to Midpoint Peg order functionality on Nasdaq. In this article, we will provide you with background information, implementation timeline, expected changes to Midpoint Peg behavior, valid FIX order entry methods for Midpoint Pegs, streamlining of order entry methods, email alert subscriptions, and information about Nasdaq.

Background Information

As previously announced in ETA 2023-60, Nasdaq will be introducing performance improvements to the Midpoint Peg order functionality on the exchange. These enhancements were originally scheduled to be deployed on a specific date, but they will now be implemented starting on January 29, 2024. The goal of these enhancements is to improve the overall performance and efficiency of the Midpoint Peg order functionality.

Implementation Timeline

The enhanced Midpoint Peg order functionality will be rolled out over the course of several weeks. During this period, customers may notice some differences in order handling behavior. It is important to note that two orders sent by the same customer with the same order feature may be handled differently by the system until the feature has been fully rolled out on the exchange. Nasdaq is committed to ensuring a smooth transition during this implementation period.

Expected Changes to Midpoint Peg Behavior

1. Acceptance and Acknowledgement of Non-Routable Pegged Orders: Non-routable pegged orders will now be accepted and acknowledged at the customer entered limit price. Previously, pegged orders were acknowledged at the first price at which the order was booked on the system.
2. Handling of Non-Peggable Orders: In the enhanced Midpoint Peg order functionality, if there is no available price to which a non-routable pegged order can be pegged, the order will not be posted on the Nasdaq book and will be re-entered once there is an available price. This is a change from the current behavior where such orders would either be rejected or posted at the pegged order’s entered limit price.
3. Cancellation of Non-Peggable Orders: In cases where there is still no price available for a non-routable pegged order after one second, the order will be canceled back to the entering party. This ensures that orders are not left in a limbo state for an extended period of time. Currently, such orders would either be rejected or posted at the pegged order’s entered limit price.

These changes are aimed at improving the overall functionality and execution of Midpoint Peg orders on Nasdaq.

Valid FIX Order Entry Methods for Midpoint Pegs

Nasdaq will be streamlining the valid FIX order entry methods for Midpoint Pegs, including M-ELO. The accepted combinations for submitting these orders will be as follows:

1. Midpoint Peg:
   • DisplayInst (tag 9140): No
   • ExecInst (tag 18): M
2. M-ELO:
   • DisplayInst (tag 9140): No
   • ExecInst (tag 18): M, N, blank
   • CrossTradeFlag (tag 9355): E

These streamlined methods will simplify the order entry process for Midpoint Peg orders.

Streamlining of Order Entry Methods

The streamlining of valid FIX order entry methods for Midpoint Pegs is part of Nasdaq’s ongoing efforts to improve efficiency and user experience. By simplifying the process, traders and market participants will have more clarity and ease in submitting their orders, leading to faster and more accurate executions.

Email Alert Subscriptions

Nasdaq offers customers the ability to subscribe to email alerts for updates and news across various Nasdaq markets. By creating and maintaining a profile, customers can customize their alert preferences and receive important information directly to their inbox. However, it is important to note that unsubscribing from an email list may result in not receiving critical emails regarding Nasdaq’s trading and data products, regulatory issues, or marketplace initiatives. Customers are encouraged to stay informed and maintain their email subscriptions to ensure they receive timely and relevant information.

About Nasdaq

Nasdaq is a leading global provider of trading, clearing, exchange technology, listing, information, and public company services. With a diverse portfolio of solutions, Nasdaq empowers customers to plan, optimize, and execute their business vision with confidence. Nasdaq’s technology powers more than 90 marketplaces in 50 countries, making it a key player in the global capital markets. It is home to approximately 3,900 total listings with a market value of approximately $13 trillion.

Conclusion

The enhancements to Midpoint Peg order functionality on Nasdaq are an important step in improving the overall trading experience for market participants. The expected changes to the Midpoint Peg behavior, along with the streamlining of order entry methods, will provide traders with more control, accuracy, and efficiency in executing their orders. Nasdaq remains committed to delivering innovative solutions and continuously enhancing its trading platform to meet the evolving needs of the market. Stay tuned for the rollout of these enhancements and take advantage of the improved Midpoint Peg order functionality on Nasdaq.