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Introduction to SuperMontage used by NASDAQ

SuperMontage is a very powerful fully integrated order entry and execution system used by NASDAQ.

It being more efficient and accurate, SuperMontage replaced the earlier systems namely, SOES and SuperSoes.

SuperMontage is capable of processing more than 5,000 transactions per second. The system was approved by the regulators in 2001 and was implemented in 2002.

Currently NASDAQ is the largest stock exchange in the world, based on the trading volume (number of transactions). With the help of SuperMontage, NASDAQ is able to offer traders a more informative and useful service.

Shows Top Five Bids and Offers

The most important feature of SuperMontage is that instead of just showing the best currently available price to investors looking at buying or selling a particular security, it also shows the interest available five levels deep. For example, if the best price somebody was willing to sell a particular stock for was $10, the system would show the volume available for $10, $9.99, $9.98, $9.97 and $9.96, that is, how many people are wanting to sell at each of these prices.

This kind of insight can be really helpful because sometimes the best price may not really be the true price as someone may be quoting that price because they are desperate to buy or sell that stock. In such a situation, the second best quote may be very different from the best price, which will help the traders judge what they can realistically expect from that trade.

List Offers at Multiple Prices

In SuperMontage, traders can list offers at multiple prices. For example, assume that a trader has 1000 shares of a company available for sale. Using SuperMontage, they can make an offer to sell all 500 shares at $10, 300 shares at $9.95 and the remaining 200 shares at $9.20. By doing this, the traders’ likelihood of finding deals at mutually acceptable prices increases.

Anonymous Trading

SuperMontage system allows fully anonymous trading. This means that a trader/boroker can place an order without other without other traders knowing about their identity. During the entire clearing and settlement process the order remains anonymous.

In brief, SuperMontage is the first stock market platform that:

  • Fully integrates a public limit order book and market maker quotations.
  • Allows market makers and ECNs to enter multiple quotes at single or multiple price levels.
  • Displays orders either anonymously or by name.
  • Shows aggregate investor buy and sell interest five levels deep.
  • Time-stamps individual orders to preserve position and priority.

These SuperMontage features add up to a fairer, more level playing field for all market participants, increasing market quality and investor protection.

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