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News
Ho-hum start for late quotes
October 25, 1999: 7:21 p.m. ET

Uneventful beginning for Nasdaq system; few expected to participate
By Staff Writer Tom Johnson
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NEW YORK (CNNfn) - The Nasdaq Stock Market's first attempt offering after hours stock quotes went off without a technical glitch Monday, although participation on the new system was expected to be very light.
     Nasdaq spokesman Scott Peterson said as of 6:00 p.m., there were no reported technical problems with the after hours ticker system made available to broker/dealers and electronic communications networks for the first time Monday evening.
     Peterson said Nasdaq had no initial indications of how many brokers actually participated in new system, designed to provide investors with greater access to how stocks are trading after hours, or how many stocks were actually listed.
     He noted tracking such traffic is expected to be difficult for several weeks, particularly since participation among those doing after hours trades is voluntary until mid-November.
     "It's really going to be hard to get an accurate representation until Nov. 15" when participation becomes mandatory, Peterson said.
    
Brokers slow to participate

     Still, many brokerage firms and dealers interviewed Monday, said they expect traffic on the system to be very light for several weeks, if not months.
     Currently, investors can only obtain after hours quotes from a handful of companies that conduct after hours trading. The Nasdaq system is designed to provide all brokers and electronic networks, and therefore all investors, with that same information.
     But many companies currently offering after hours trading have not yet upgraded their technology to tap into the Nasdaq ticker system, which will track stocks quotes until 6:30 p.m. Eastern time.
     "There are lots of things that need to fall into place with this," said Buzzy Geduld, president of Herzog, Heine Geduld, one of the oldest and largest Nasdaq trading firms. "There's a lot of programming that still needs to be done."
     Geduld said roughly half his staff stayed after the markets closed at 4 p.m. Monday, "some just out of curiosity, the rest because we asked them to stay."
     But Geduld said his company planned to employ only a minimum staff to monitor after hours trading until the beginning of the year, likely the first opportunity his company will get to utilize the Nasdaq system.
     Nasdaq has made participation in the new ticker network -- which simply tracks after hours quotes -- voluntary until Nov. 15, when all broker/dealers trading Nasdaq stocks after hours will be required to list trades made through their networks.
     However, the Nasdaq system won't even list best bid or offer quotes - essentially the best buying or selling prices available on any network -- on after hours trades until Dec. 6. With Geduld and others expecting Y2k computer worries to dominate their attention at that point, many said they don't plan on participating in the system until next year.
     That led some to question how useful the system will be, at least initially, particularly since the number of available stocks could change from day to day depending on who's participating.
     Other technical problems exist as well.
     For instance, the Nasdaq after hours ticker system currently treats from 4 p.m. to 6:30 p.m. as a separate trading session, requiring clearing house firms like Herzog, Heine to close their systems at 4 p.m., clear their books and essentially reopen the stocks again seconds later -- something they are not currently equipped to do.
     "I think [true after hours trading] is still a ways off," said Sydnie Kampschroeder, a spokeswoman for Archipelago, an electronic communications network that currently offers after hours trading until 5 p.m. "Besides, right now, our customers are more interested in pre-opening quotes."
    
Future of late trades unclear

     But Michael Holland, chairman of New York-based Holland & Co. investment banking firm, said while demand for after hours trading is expected to be light for some time, it will eventually become an important part of how American stock markets function.
     "It's very possible it will take a completely different course than any of us expected," Holland said. "The real story is where will this thing go sometime in the future, particularly as people continue to become more and more involved in telecommuting."
     Both Nasdaq and the New York Stock Exchange --which plans to offer after hours quotes beginning this Friday through the Chicago Stock Exchange -- have committed to offering after hours trading on their networks, but not until sometime next year.
     The Nasdaq after hours ticker is the first step in that process, but its introduction was delayed three times before Monday's launch, indicating true after hours trading may yet be some time off.
     Some companies, like Archipelago, have questioned whether there is enough demand for after hours trades to extend the Nasdaq or NYSE trading hours at this point. But analysts said the markets cannot afford to lose the business to electronic communications networks, which currently handle a large portion of after-hours trades.
     "This is clearly a defensive, reactive move by Nasdaq, but a necessary one," Holland said. Back to top

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