She sees two factors which give an advantage to the NYSE and the ISE: deep pockets and a scalable trading platform.
There are two reasons behind the NYSE threat, according to Perfumo. First, NYSE can afford to buy another exchange-and the CBOE is preparing to go public. And second, NYSE has a scalable trading platform, which allows for consolidation. Without a scalable electronic platform, consolidation makes little sense.
"Clearly, New York wants to increase its market share and may have to buy an exchange and merge it with the P-Coast," says Meyer ("Sandy") Frucher, chairman of the Philadelphia Stock Exchange. "If Nasdaq wants to get into the game, they will have to buy somebody as well."
Repetto calls NYSE Arca Options a "new competitor with deep funding." Its recent aggressive fee reductions for market makers are a sign of its ambition.
The old PCX trading floor in San Francisco once on it's last legs, is alive and well under the NYSE banner.
Checking yesterday's IBD, the NYSE Arca (PCX) trading volume was solid with about a twenty percent share among all the exchanges. They were number one in call volume, with 1.8 million contracts traded there out of 6.8 million total. That never happened in the old days.