What The Equity Expansion Of NYSE Floor Could Mean For Traders

Reuters reported on Wednesday the NYSE's plan to expand floor trading in the exchange to include all 8,600 U.S. equities by the end of 2017. The initiative to introduce over 5,000 previously excluded securities not displayed on the exchange's Big Board is aimed at increasing volume while expanding floor trading options to better match those available via automation and high-frequency.

Dennis Dick, proprietary trader and co-host of Benzinga's PreMarket Prep morning show, discussed some of the trading implications of the announced expansion and what the move might mean for future market events.

More News Is Good News

Dick, for one, is enthusiastic about the change. He believes the expansion will increase the volume of floor trades as more exchange options become available.

He was particularly excited for what it means for NASDAQ tech stocks like Apple Inc. AAPL and Microsoft Corporation MSFT. He liked the prospect of receiving the earlier and more transparent NYSE imbalance data on those securities rather than relying on the 9:28 a.m. release NASDAQ currently delivers. "I think were going to start getting imbalance data at 8:30 in the morning for Apple," Dick explained. "That's awesome. It's more information for us."

Inter-Exchange Surprises

Following up on the potential of receiving imbalance data sooner, Dick posited the potential for price disparity between markets, saying, "You could get situations where stock might open one price on the NASDAQ and open on a significantly different price on the NYSE floor."

Dick also wondered whether the floor inclusion of previously unavailable stocks couldn't cause some interesting market moving reverberations between markets. "If some volume action goes to the NYSE stocks and goes through the designated market mover on the floor, maybe there is going to be a big opening event for AAPL on the NYSE floor too," Dick said.

The extent of this change, and what it might mean for trading the NYSE, is still up in the air, but Dick is eager to witness the impact. "It's very interesting overall, the dynamics here. How much of the frequency is going to go from the NASDAQ open to the NYSE open?" Dick concluded.

Listen to the full breakdown of the NYSE expansion at the 25-minute mark in the clip below.