Second into the market was the letter P. Shortly after Island ECN pioneered the maker-taker pricing model in the ECN space, Archipelago decided to join the party in 1997 and offer a free ECN service. In fact, the name Archipelago itself (for which Arca is a common short form) was chosen to imply that it would be superior since the dictionary definition of its name is “a group of islands.” In 2000, Archipelago merged with the Pacific Stock Exchange (P on the tape) to form the Archipelago Securities Exchange. It retained the PACX identifier for years to come (as it did when I started training at Swift), and even though it later became more common to designate it as ARCA on most platforms, the letter code typically remains displayed as P. It became a real threat to all the big players at the time: Island, the original NASDAQ system, and the old all-human NYSE of the time. By the time I was training at Swift, the days of free Arca were long gone; Arca had by then adopted the same maker-taker pricing model used by their competitors at Island ECN.

Following NASDAQ's purchase of INET in 2005, the NYSE Group followed suit with the acquisition of Archipelago Securities Exchange in 2006. The Arca ECN has since been known by the full name NYSE Arca, but continues to be designated P for reasons logical only to those who remember the origin of the platform. (As a side note, NYSE Arca is a name used only to signify that the Arca ECN is owned by the NYSE; it does ...

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