CBOE Delays New Options Market as SEC Mulls Ban on Flash Orders

from businessweek.com:

>>CBOE Delays New Options Market as SEC Mulls Ban on Flash Orders

Jan. 8 (Bloomberg) -- The Chicago Board Options Exchange, the largest U.S. equity derivatives market, will wait until the second half of the year to start a new platform catering to high-speed traders while the Securities and Exchange Commission reviews industry practices.

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CBOE is creating C2 to appeal to so-called high-frequency traders who sometimes send thousands of orders a second to exchanges to take advantage of fleeting price changes. The all- electronic exchange was approved by the SEC on Dec. 10.

Secaucus, Not Chicago

C2 will enable CBOE to compete more effectively with newer exchanges with different market models, the Chicago-based firm says. As part of this effort, C2’s matching engine will be based in Secaucus, New Jersey, instead of Chicago, reducing the time to trade and update quotations for C2’s participants based in the New York metropolitan area.