From: Ron Baakkonen [rbaakkonen@peak6.com]
Sent: Thursday, September 04, 2003 4:24 PM
To: rule-comments@sec.gov
Subject: BOX - SR-BSE-2002-15

PEAK6 Investments, LP, is a leading provider of liquidity in the U.S. equity 
options markets. We urge the SEC to quickly approve the rules proposed by the 
Boston Options Exchange and allow trading to begin as soon as possible.

The BOX represents a break from the traditional market model in which special 
trading rights are granted to the few in the hope that markets will be more 
orderly. In contrast to this view, the BOX enables all market participants to 
compete on a more level playing field. We support this view and believe that 
active and eager participation by the broadest possible set of investors is 
the best guaranty of deep and liquid markets. With a transparent trading model, 
all-electronic execution, lower costs, and minimal distinctions between trading 
participants, the BOX’s market model is a quite simply a better way to trade 
options.

PEAK6 has previously commented on the BOX’s proposed rules. In regard to some 
of the current proposed changes,

Directed Orders -  

Directed Orders enable Order Flow Providers to solicit order facilitation (via 
a PIP order) from specific Market Makers. We strongly support this proposed 
change. Directed Orders will greatly facilitate communication between market 
participants and will encourage active participation by Market Makers in the 
Price Improvement Process. This greater participation in the PIP will yield 
tighter markets and improved execution to the end user. Without such a mechanism, 
Market Makers and Order Flow Providers that want to facilitate orders in a timely 
manner must implement proprietary communication mechanisms, resulting in duplication 
of effort and limiting the number of Market Makers willing to participate in order 
facilitation.

Customer PIP Orders (CPOs)-  

Customer PIP Orders allow public customers to participate in the PIP process 
via their broker/dealer. While we expect this mechanism to be infrequently 
used, we see no harm in making the PIP available to public customers.

 

Irrespective of these and any other comparatively minor changes to the BOX rules, 
PEAK6 stands ready to commit substantial capital and trading expertise to trade 
on the BOX as soon as it is ready. We strongly support the BOX’s mission and 
believe it represents the future of option trading.

 

Sincerely,

 

Ron Baakkonen
Manager, Electronic Trading & Retail Flow
PEAK6 Investments, LP
209 S. LaSalle St., Suite 200
Chicago, IL  60604
(312) 362-2308