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ISE will be the first U.S. market to combine the efficiencies of electronic trading with the time tested advantages of trading in an open auction market environment. An auction market is one in which open bids and offers meet directly on some facility, with transaction prices thus determined by the then current level of supply and demand. This results in a superior market making environment rather than a dealer market, where prices are determined by dealers buying and selling for their own inventory of securities.
ISE's philosophy is that the investing public should be given the highest priority. Thus, this patent pending trading system has at its core the following:
- Customer orders will always be executed before professional orders
- A customer market or marketable limit order will not be executed automatically against the ISE BBO while another options exchange is disseminating a better price. If the away BBO is better, the order is referred to the PMM who will either match the away market price or attempt to get the better price from the away market; ISE will be the only fully electronic market in the world that incorporates quotes from other exchanges so that customers trade at the best price
- A complete, detailed electronic record (audit trail) of all transactions, time stamped to the nearest 1/100 of a second, will be immediately available for surveillance purposes.
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