SuperMontage

What Is a SuperMontage?

A SuperMontage (SM) is a fully integrated order display and execution system for the trading of Nasdaq-listed securities. Nasdaq's SuperMontage trading system facilitates better prices for investors while allowing brokers to better serve their customers by providing increased transparency.

NASDAQ has now integrated its electronic communication network (ECN) system with other tools, including SuperMontage and INET (a combination of Instinet ECN and Island ECN), to form a comprehensive system that came to be known as the NASDAQ Market Center Execution System.

How SuperMontage Works

SuperMontage is Nasdaq's fully integrated order entry and execution system which replaced earlier systems including the small order execution system (SOES) and SuperSoes. SuperMontage allows firms to list multiple quotes and orders for each security, and permits market makers to input all or part of their buy and sell interest, with or without other traders knowing their identity. More than 5,000 transactions per second can be processed by SuperMontage.

One of its most valuable features is that it shows five levels of depth rather than just the best current price. For example, if the best price somebody was willing to buy a particular stock for was $10, the system would show the volume available for $10.00, $9.99, $9.98, $9.97, and $9.96, that is, how many people are wanting to buy at each of these prices. This information can help investors and traders estimate more accurately an instrument's near-term price movements.

Nasdaq's SuperMontage trading platform was gradually rolled out in October 2002. At a cost of $107 million to build, its technology offers the fullest available insight into the market and available liquidity. The system can automatically execute orders of up to 999,999 shares. When it was introduced, SuperMontage represented a huge jump for Nasdaq in what it can collect and how it displays that information.

In SuperMontage, traders can list bids and offers at multiple prices. For example, assume that a trader has 1000 shares of a company available for sale. Using SuperMontage, they can make an offer to sell all 500 shares at $10, 300 shares at $10.25, and the remaining 200 shares at $10.50. By doing this, the traders’ likelihood of finding deals at mutually acceptable prices increases.

SuperMontage and Anonymous Trading

The SuperMontage allows for fully anonymous trading. This means that a trader/broker can place an order without other traders knowing about their identity. During the entire clearing and settlement process, the order remains anonymous.

SuperMontage is the first stock market platform that:

• Fully integrates a public limit order book and market maker quotations.
• Allows market makers and ECNs to enter multiple quotes at single or multiple price levels.
• Displays orders either anonymously or by name.
• Shows aggregate investor buy and sell interest five levels deep.
• Time-stamps individual orders to preserve position and priority.

In total, these features create a fairer, more level playing field for all market participants, increasing market quality and investor protection.

Correction—Dec. 2, 2022: A previous version of this article misattributed the acronym INET to the Interbank Network for Electronic Transfer. In this context, INET refers to the merge of Instinet ECN and Island ECN.