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CME Seals the NYMEX Purchase, So Who’s Next?

Aug 20, 2008 @ 06:11 PM By Ivy Schmerken,

With CME Group winning the lion’s share of votes from the New York Mercantile Exchange members to acquire its parent company NYMEX Holdings on Monday, the mammoth futures exchange is closing another chapter in the exchange consolidation race.

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Competition Heats Up Among Euro ATSs

Aug 15, 2008 @ 01:07 PM By Cristina McEachern,

Electronic trading is heating up in Europe this summer as Turquoise officially went live with trading in 10 initial stocks and Chi-X Europe’s market share in FTSE 100 stocks climbed to 20 percent.

Chi-X may have the head start in the ATS race, but several new ATS are lining up and readying for launch this year and into next year.

Competition is only going to increase with Bats Trading, Equiduct and the Nasdaq OMX Europe platform being the next in line to launch in Europe.

As more ATSs enter the market and competition ramps up, the London Stock Exchange has said it will cut trading fees and has plans for liquidity provider incentives to garner more algorithmic trading flow.

Equiduct, the Borse Berlin ATS, announced it was moving to a maker/taker model in an effort to reward liquidity providers as it prepares for an upcoming platform launch.

Liquidity is the name of the game for these ATSs and whether or not they can build momentum will be based on not only their pricing structure, but many are also looking to their backers to get things moving in the right direction.

As more ATSs enter the market and trading off-exchange continues to grow in Europe, time and volume will tell which will be successful and what impact that will have on the traditional exchange model.

In an effort to track electronic trading across the growing number of venues, Xtrakter, a fixed income market utility, has begun to track liquidity in the European markets.

Below are the results for transactions processed by Xtrakter during the month of June for equities and fixed income. According to Xtrakter, the results do not include data relating to systematic internalisers (SIs) or data for trades conducted on the LSE stock exchange trading system (SETS).

Equities (over the counter 20.75%)
1. Euronext Paris – 17.87%
2. Chi-X Europe - 9.41%
3. Deusche Kassenverein - 8.99%
4. London Stock Exchange – 7.05%
5. Electronic Share Market – 6.83%
6. Deutsche Borse – 6.14%
7. NYSE Euronext Amsterdam – 6.06%
8. Nasdaq (USA) – 3.35%
9. Virt-X – 2.91%
10. Other venues – 10.64%

Fixed Income (over the counter – 88.3%)
1. Tradeweb (Europe) – 1.8%
2. MTS SPA – 1.66%
3. ICAP Electronic (Europe) – 1.64%
4. Bondvision – 0.66%
5. Euro Global MTS – 0.6%
6. NYSE Euronext (Amsterdam) – 0.59%
7. London Stock Exchange – 0.53%
8. ICAP Electronic (USA) – 0.46%
9. Euro MTS – 0.43%
10. Other venues – 2.40%

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Are Institutions in the Dark About Anti-Gaming?

Aug 14, 2008 @ 11:55 AM By Ivy Schmerken,

Every major broker dealer says it has the best anti-gaming technology to prevent information leakage in dark pools. However, institutional traders I spoke to recently seemed skeptical of whether sell-side firms would police their dark liquidity pools,suggesting that the independent firms (ITG, Liquidnet and Pipeline) were more likely to expel participants that were sniffing out institutional orders or trying to manipulate prices.

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Sybase Working on Hedge Fund Analytics Solution

Aug 7, 2008 @ 11:48 AM By Kerry Massaro,

Yesterday I was invited to lunch with John Chen, CEO, Chairman and President of Sybase. Greg MacSweeney, Editor in Chief of Wall Street & Technology and I, dined with him downtown at Harry’s, where we spent a good hour and a half discussing Sybase’s plans for the financial services vertical.

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Career Opportunities Emerge Out of the Credit Crisis

Aug 5, 2008 @ 05:25 PM By Ivy Schmerken,

While the credit crisis has meant bad news for traders on the job front, some capital markets firms actually see this as an opportunity to expand into new areas of equity trading and risk management. Take Pali Capital, the U.S. broker- dealer subsidiary of Pali Holdings Inc., recently lifted a portfolio trading and risk management team from CIBC World Markets to expand its offerings in equities and execution.

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The West Coast Trading View

Aug 1, 2008 @ 11:28 AM By Cristina McEachern,

I recently got back from a great trip to the West Coast. I traveled out west specifically to visit three trading floors, three very different trading floors that are great examples of operations both big and small on the opposite side of the country.

While New York City may be the center of financial trading activity, the West Coast is not a bad spot to set up shop. Although traders typically start their days much earlier, they are done earlier in the afternoon. Many traders I spoke with enjoyed being able to spend time at with their families, on the golf course or even at the beach while it’s still sunny and nice outside.

Having grown up in Southern California I had a soft spot for the first trading floor I visited out West – JonesTrading. A family business started more than 30 years ago, JonesTrading epitomizes West Coast cool. The Westlake Village offices look over a man-made lake where kids are learning to sail and the upstairs offices have balconies where meetings often take place.

As for the trading floor, there are surfboards hung on the walls and the busy floor could easily be in a New York City office building, except for the lake outside and the distinctly West Coast vibe.

Next I headed south to San Diego to check out Nicholas Applegate Capital Management. Again, the views were spectacular. The firm is located on a top floor in downtown San Diego with an elevated row of traders that look directly over the bay. Not a bad place to have to start your day at 5 in the morning.

Then I hopped a quick flight up to Tacoma, Washington to visit Russell Investments. I’m sure the weather is not always as picture-perfect as the day of my visit, but the views of Mt. Rainier from just outside the office were spectacular.

Maybe I was in awe of the views because I’ve been in the concrete jungle of New York City for too long, but these trading floors were definitely great examples of the advantage of being away from the big city.

Russell is a larger operation with a big trading floor and a very open office plan with traders and portfolio managers, analysts and IT all sitting together for better communication and interaction.

All three trading floors were unique to the firm’s goals and trading style and I think that’s why Advanced Trading readers enjoy hearing about and viewing other trading floors in our Anatomy of a Trading floor section both online and in print.

So not to worry these three trading floors will be featured in upcoming months in the Anatomy of a Trading floor section. Hopefully the photos have captured the views as well as the range of trading technology and applications that each trading floor relies on.

If you’re interesting in having your trading floor featured in Anatomy of a Trading floor please email me at cmceachern@techweb.com.

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North Asset Management (London)
George Papamarkakis
Managing Partner and Chief Investment Officer

There are a lot of funds in the industry above $10 billion and a lot of funds trying to employ a very diversified portfolio. And I think there's a big question mark whether they'll be effective in terms of deploying the capital in a diversified manner. There are ... More >>