Important, all traders read, "issues"

Don, I read that RMBS piece by Dennis, and what I don't understand is why your liquidity provider market share has dropped so much on the NYSE. If you use GS and some guys trade on sigma-x, does that front end NOT allow for E-quote interaction?

 

We can trade the dark pools of GS and others, yes. We cannot place sub-penny orders however, which forces us to hit bids and take out offers (just like the "old" days, LOL). Thus the lowering of liquidity providing.

Don

 

You are runing "index arb" with

a) single digit
2) double digit
3) triple digit

million USD AUM at a "prop-like" firm ? Successfully ?

Aha.

 

So, what's GS point of view ? Did you ask them about their "professional" stance ? What's your relationship manager telling you about your lower volumes ? Is HE / SHE happy ?

 

This will not happen. If things got to this point, the equity markets would just operate like the forex market. If you compare quotes from all the major forex dealers the quotes are almost the same. If they were not, then traders would arb the different dealers.

But this is a real trend. A lot of the volume is moving off of the exchanges and to market makers, B/D's, Dark Pools, etc....

 

We've already seen an increase in volume from our "JVC" program (where traders can have a scond account with zero downside risk to run automated pairs programs with a split in profits)...which keeps GS "happy" - and overall, they do try to keep GSEC (Execution and Clearing) apart from Investment banking and trading.

Don

 

I'm not talking about sub-pennying or Darkpools. I place orders that go directly to the handhelds on the floor, and get parity on almost all my trades via e-quotes. If GS is dumping your traders orders in the dark, murky seas of darkpools (where they can flash away without supervison), then you need to talk to your rep at GS to take advantage of the tools that the NYSE has to offer to all traders.

 

Has business at Bright trading been badly affected by these low Volumes, Don?

 

Not really, not yet...we have a handful of traders who trade illiquid stocks primarily, and they have been affected somewhat. Just trying to stay ahead of the game if at all possible.

Don

 

That's great, but you're still not sure if there are better prices between the NBBO, regardless of the broker on the floor. We can go directly to the floor too, but haven't found an edge by doing so (small addtional fee for doing so).

Hey, we're all in the same boat, simply trying to keep up with the best possible order routing and execution ...for ourselves and our traders of course.

Don