Commentary

Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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Should have had a pilot program a long time ago.

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May 31, 1999

At Deadline

By John A. Byrne

Super ECN

The Tradebook SuperECN is the latest incarnation in the crowded field of electronic communications networks. The new system is a strategic partnership between Bloomberg's Tradebook and ITG's execution systems, which include QuantEX, ITG Platform and POSIT. The Tradebook SuperECN will give customers access to Tradebook's continuous market and ITG's mid-point crossing capabilities in Nasdaq and listed shares.

While both systems combined are dwarfed by the volume of Nasdaq orders executed on Reuters Groups' Instinet, the partners are inviting other networks to join the arrangement. Bloomberg trades some 32 million shares a day, while POSIT trades about 25 million shares daily. By contrast, Instinet executes about 160 million shares a day on Nasdaq.

Tradebook and ITG, both based in New York, say institutional customers seeking liquidity will have an opportunity to switch their unfilled orders automatically from either Tradebook or ITG's network. In a separate development, Bloomberg Tradebook is teaming up with CLSA Emerging Markets in Hong Kong to provide electronic agency brokerage in 65 countries.

Michael Milken

Remember Michael Milken, the junk bond king tossed out of the securities industry? Well, Milken is not sitting on the sidelines. He is as busy as ever as a celebrity speaker and as chairman of Knowledge Universe, a private company that develops educational software. Milken was the speaker at a financial symposium in Greenwich, CT., which was sponsored by Los Angeles-based Jeffries & Company.

Milken is nothing if not intellectual. So he fitted in well with the Jefferies crowd, reminding them that this century is the era of physics. The coming century will be the era of biology. The emphasis will be on the physical well-being of mankind, he noted. On that point, Milken's recipe for substantially increasing U.S. gross domestic product is longer working lives for the average American. Given that Americans are living longer today than ever before, Milken said the additional span of good health enjoyed by older folk should be put to work -instead of retired. Milken thinks mandatory retirement ages are out of date.

Sign War

Nasdaq's plan to have the world's largest neon sign flashing across Times Square by year end is in doubt. The National Association of Securities Dealers is being blocked by a tenant in the same building where Nasdaq hoped to showcase the $20 million zipper. The zipper would encircle the surface of a cylindrical structure at 4 Times Square known as the Conde Nast building. Nasdaq's protaganist is Conde Nast, publisher of such glossies as Vanity Fair and The New Yorker. Conde Nast is concerned that light from the new zipper could overwhelm the offices of its new headquarters. S.I. Newhouse, the chairman of Conde Nast, said Nasdaq's plan would violate his lease agreement.

Nasdaq, for its part, says that its blueprint for the zipper, roughly the size of three basketball courts, complies with the terms of its lease. The lease provides space at the building to allow Nasdaq to move its marketing department from downtown Manhattan. Nasdaq is clearly upset. The dispute will likely scuttle plans to have the zipper in place for Millenium celebrations on Times Square which will be broadcast live on television around the world. The dispute has been sent to an arbitrator.

NYSE Step

The New York Stock Exchange has taken a step that some pros consider is designed to fight back potential competition for listed business from electronic communications networks (ECNs). In a filing with the Securities and Exchange Commission, the Big Board is seeking permission to activate a rule that would bar specialists from giving price improvement on orders routed by ECNs. At the moment, a specialist must not offer prices that are inferior to those residing on ECNs.

People familiar with the filing, said the Big Board is gearing up to block competition from ECNs that are transforming themselves into full-fledged stock exchanges. In the filing, the Big Board says that allowing specialists to offer superior prices on an ECN is detrimental to the specialists role on the floor of the exchange.

A spokeswoman for the Big Board said the filing speaks for itself.