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Principal Blind Bidding In Portfolio Trading

Traders Magazine, August 1998

Special toTraders Magazine

Planning to bid for an institution's portfolio? A profitable way to utilize capital? Don't be fooled. Every year, broker dealers enter the business and soon quit when losses mount. Only the strongest survive. Among them is D.E. Shaw Securities, one of Wall Street's top principal portfolio-trading firms.

The New York-based broker-dealer subsidiary of D.E. Shaw & Co., which started trading portfolios as a principal in the early 1990s, now averages four principal trades daily, and this year handled one trade with a value of about $1 billion. (A typical principal portfolio trade is valued at only $50 million.)

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