The SuperDOT System

SuperDOT enables exchange members to send orders directly to the specialist over computer lines. The largest market order that can be handled is 30,099 shares. In 1999,

80 PART I Introduction

SuperDOT processed an average of 1.07 million orders per day, with 95% of these trades executed in less than one minute.

SuperDOT is especially useful to program traders. A program trade is a coordinated purchase or sale of an entire portfolio of stocks. Many trading strategies (such as index arbitrage, a topic we will study in Chapter 23) require that an entire portfolio of stocks be purchased or sold simultaneously in a coordinated program. SuperDOT is the tool that enables the many trading orders to be sent out at once and executed almost simultaneously.

The vast majority of all orders are submitted through SuperDOT. However, these tend to be smaller orders, and in 1999 they accounted for only half of total trading volume.

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