NYSE Euronext (NYX) slashed order execution times 20-fold at the New York Stock Exchange, part of an effort to catch up to faster competitors that have taken market share.

With the implementation of a new system for processing orders on the NYSE, customers will see trades executed within five milliseconds, compared with 105 milliseconds previously. As recently as 2007 the time was 350 milliseconds.

That change is huge in the realm of high-frequency trading firms, which now measure time by the microsecond, or one-millionth of one second.

But even after the speed boost, NYSE Euronext continues to lag rival Nasdaq OMX (NDAQ) as well as new electronic platforms BATS Exchange and Direct Edge, streamlined venues that have attracted algorithm-driven investment firms and proprietary trading groups with a combination of fast executions and attractive pricing.

"For [competitors] who have come into the market recently, the barriers of competition are low, so they can come in with the newest technologies and without a lot of the constraints of running a big market," said Louis Pastina, head of NYSE Operations, in an interview.

"This allows us to be very competitive, on a latency basis, with most of our competition."

While NYSE Euronext has juggled fees to stay competitive, it's also counting on new technology to draw traders, with the new order processing system replacing its 33-year-old SuperDOT platform. The trans-Atlantic exchange operator is also building a new low-latency network for data centers in New York and London.

The moves aim to reassert NYSE Euronext's dominance in U.S. stock trade, badly dented by intense competition in recent years.

This month saw the exchange's share of U.S. equities trading slide to 29%; in March 2008, it had half the market.

Chief executive Duncan Niederauer this year targeted a 50% market share in stocks listed on the NYSE, a goal he has acknowledged as "aggressive"; in late June, NYSE Euronext claimed about 39.9% of trade in so-called Tape A securities.

Alex Lamb, head of business development for RTS Realtime Systems Group, said the push for speed will raise NYSE Euronext's profile among the high-frequency trading outfits his company serves.

"My view is it's going to attract traders back," he said.

NYSE Euronext's markets claim about 15% of the order flow from clients of Lightspeed Trading LLC, another direct market access provider for high-speed traders, and chief strategy officer Andrew Actman said that number could grow if clients see faster execution times.

"Every microsecond in their world can potentially equate to getting a better fill, and better profitability," Actman said.

NYSE Euronext will also promote its trading floor, which has lost much trading volume to electronic trading, but can help damp volatility when markets are under stress, according to officials.

"As venues progress toward zero latency, the content of the marketplace will become more important," said RTS's Lamb. "NYSE and Nasdaq offer a broader portfolio of services than other venues, so to maintain their position as a place of trade absolutely makes sense."

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com

(Kevin Kingsbury contributed to this story.)