Henry Capital ManagementMr. Jonathan G. Katz, Secretary
RE: File No. SR-BSE-2002-15 Dear Mr. Katz: Henry Capital Management is a broker-dealer making markets in listed options on the floor of the PCX. The firm was founded by two veterans of the market making business with 20 years of combined trading experience on the CBOE, CBOT, and PCX exchanges. Henry Capital strongly supports the introduction of the all-electronic Boston Options Exchange (BOX) for a variety of reasons. Lower Cost of access: The fully electronic structure of BOX coupled with the absence of a seat requirement will virtually eliminate the typical barrier to entry for many smaller market makers. The minimal fixed costs in conjunction with low cost of execution will attract new market makers and enhance competition, thereby improving pricing for the public customer. Faster Execution: The all-electronic BOX will provide faster executions and therefore faster reporting of trades to all market participants. This allows all participants the ability to better gauge their positions and will enhance market liquidity. It will also go a long way in helping to eliminate unnecessary errors by reporting trades in a timely manner. More Competitive Market: The BOX will help to create a more competitive environment by allowing greater access than any current exchange, either electronic or open outcry. By attracting a great number of smaller market makers along with larger broker dealers and liquidity providers BOX will allow the same access for all levels of market participants. This will lead to a robust trading environment that can only benefit the public customer by providing the most efficient pricing available. In summation Henry Capital Management feels that the introduction of the BOX will dramatically improve the current options marketplace. We are eagerly awaiting approval of this exchange and look forward to the day the playing field is finally level.
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