OptiMark System's Debut at Pacific Is Postponed


A new all-electronic stock trading system devised by OptiMark Technologies and slated to start this month on the Pacific Exchange will be delayed until late October, according to a Pacific spokesman.

The cutting-edge system, a hot topic in the industry, is designed to let big investors trade directly, and anonymously, with one another via the Pacific's system.

"These things never come in on time," said Dale Carlson, spokesman for the Pacific, which has trading floors in Los Angeles and San Francisco. Carlson said that initially the OptiMark system will only trade about five stocks as part of a test program.

Carlson said the later start date had nothing to do with a merger deal announced in July between the Pacific and the Chicago Board Options Exchange. The two agreed to combine into one market that would handle the bulk of the nation's stock options trading, though negotiations are still ongoing.

Carlson said an official merger pact may be reviewed by Pacific members later this month.

The merger deal jeopardizes the future of the Los Angeles trading floor and the exchange's less lucrative equity trading business in general, and it isn't clear how the OptiMark system may be affected.

Most observers expect the Pacific's equity trading business to be spun off to another exchange in the next 18 months. Carlson said the Pacific is in talks with several parties. One possibility is that the actual trading floor could be closed while the Pacific survives as a "virtual exchange," with traders based in their own firms' offices.

The Pacific employs a staff of about 100 on its floor in Los Angeles, plus about 50 specialists.

Meanwhile, the New York Stock Exchange recently asked the Securities and Exchange Commission to reject the Pacific's request to link Durango, Colo.-based OptiMark's system to other U.S. markets. Analysts say the NYSE considers OptiMark a competitive threat.

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