By Belinda Goldsmith
NEW YORK (Reuters) - The Philadelphia Stock Exchange's Chief Executive Meyer "Sandy" Frucher said on Tuesday he expects the exchange's options floor to close within the next couple of years as electronic trading takes over.
In January, the exchange said it planned to eliminate floor trading in equities and move to a fully automated platform by mid-year to conform with new U.S. market structure requirements designed to modernize trading.
Frucher, who is also chairman of the oldest U.S. securities market, said he expected that Philadelphia, the third largest of six U.S. options markets in recent months, would also close its options floor.
"Within two years or so is a reasonable time," Frucher told the Reuters Exchanges and Trading Summit in New York.
"There is still economic value and the economic value is derived from complex orders and special situations in which people still use brokers. But the brokerage function, which will not become obsolete, is also getting increasingly electronic."
Once a floor-based market, Frucher said 90 percent of the 216-year-old exchange's trading is now conducted electronically.
Its main business is trading options that give the right to buy and sell an underlying security or index at a predetermined price within a specified time period.
Frucher said the volume and quotes for options has increased significantly. Continued...
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