In this day and age and compared to Bright's office that is closing, 25 traders is thriving. I was just emailed an article on the Schoney/etg deal. You see by the article's last paragraph that Atlanta was and is doing real well or thriving. Schonfeld Buys Day-Trading Innovator By John Hintze, Correspondent September 5, 2005 - Consolidation is continuing in the brokerage industry, this time at the end of the spectrum where firms move millions of shares a day on behalf of active and professional traders. Schonfeld Group agreed late last month to acquire Electronic Trading Group (ETG), a 13-year-old firm that is one of the oldest broker-dealers catering to fast-paced day traders, for an undisclosed amount. Schonfeld says the purchase will add 200 retail traders and 125 proprietary traders to its base of 1,200 active traders, nearly half of them retail. The move follows acquisitions by other firms that came of age during the day-trading and high-tech explosions of the 1990s. Two of the most recent were Ameritrade Holdings' $2.9 billion purchase of TD Waterhouse, announced in June, and E-Trade Financial Corp.'s $700 million merger with BMO Financial Group's Harrisdirect, announced in August. Although those firms cater mainly to mainstream e-brokerage clients, they have higher-end offerings for more active clients. An aspiration behind the mergers is to build scale and lower unit costs by putting more accounts and transactions on relatively fixed-cost back-office, clearing and technology platforms. "Scale is the goal," says Josh Galper, managing principal at Vodia Group, a consultancy to finance and technology firms. "It's becoming increasingly more difficult for midsize broker-dealers to compete." E-Trade, for example, which self-clears but uses Automatic Data Processing (ADP) as its trade processing engine, anticipates cutting 71 percent of Harrisdirect's $160 million in operational expenses. Andrew FishmanSchonfeld, which self-clears and does much of its own processing but sends trade data to ADP's Securities Industry Software (SIS) unit for regulatory books and records, expects even greater proportional savings. Schonfeld president Andrew Fishman says he can cut 90 percent of ETG's fixed expenses such as telecommunication lines, real estate and personnel, and 80 percent to 90 percent of variable expenses such as clearing incremental trades. "There will be some personnel coming over, but obviously there will be cuts in accounting and compliance," says Fishman. "We'll probably need [to bring over] more people in trade support and technology support, but not much else." Fishman says New York-based ETG had a relatively small platform-development staff and relied largely on staff at the two execution platforms it used: Goldman Sachs' Redibook and Bank of America's InstaQuote. Galper estimates that ETG's cost to clear trades through Goldman Sachs Clearing & Execution likely runs around 0.016 cents per share, and that self-clearing Schonfeld could probably cut that cost in half. For the 5 million shares that Schonfeld says ETG trades a day, the daily clearing cost would fall to $4,000 from $8,000. Schonfeld says it trades 140 million shares a day, or 2 percent to 4 percent of unlisted volume. Much of that stems from automated black-box trading strategies, in contrast to ETG, which has mostly individuals driving its trading activity. ETG's predecessor, Electronic Trading Corp., started in 1992 to give individuals access to electronic trade execution. It merged with Automated Trading Systems in 1995 to form ETG. In 2003, ETG went though another consolidation when Instinet Group sold it portions of Austin, Texas-based ProTrader Securities Corp., a pioneering day-trading brokerage that was founded in 1993 and later became one of Instinet's electronic trading assets. Schonfeld was launched in 1988 and focused on proprietary trading until 2002. It had recently purchased day-trading shops Heartland Securities Corp. and Trinix Securities. Schonfeld will fold most of ETG's 12 regional branches into its own 9 branches, while retaining the acquired firm's Atlanta branch.
Math is right as if the cost was $0.0016. Looks like the editor or fact checker didn't take the time to read the decimal places.
ratboy88's noted the math error first: 0.016 x 5,000,000 = 80,000 so, $80,000.00/day -- not $8,000.00/day
.016 cents is .00016 which of course is wrong. what they meant to say is .16 cents or $.0016. the $8000 is correct.
thrive: 1. To make steady progress; prosper. 2. To grow vigorously; flourish. there is a big difference between saying that something is "thriving" versus saying that something is "thriving compared to/relative to" something else... additionally, making comparisions to nadirs can pretty much make everthing look a bit lofty [even "nadir+1"]... citing only the number of traders in an office and nothing else [even under a compare/contrast construct] provides insufficient information to make any accurate assessment of how well that office is [nominally] doing... separate from these points, and aside from semantics regarding "thriving", i can assure you that the last time the ETG Atlanta office was "thriving" was back prior to the market topping & collapsing in 2000... if you have no agenda nor vested interest in promoting/propagandizing ETG, then it would suffice to simply state that ETG's Atlanta office was "still surviving" in a difficult environment where most other proprietary trading firms had closed up... the following quote from Mr Bright clarifies the issue, and does not convey in any sense anything remotely connoting "thriving"...