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Cover Story: The ECN Strategy

Traders Magazine, November 1999

John A. Byrne

The ECN strategy at Charles Schwab Capital Markets & Trading Group unfolded over a chance meeting. Lon Gorman met with a senior executive who overseas the REDIbook electronic communications network. Gorman said it "warmed the cockles of his heart" when he heard this executive confirm his own view on ECNs: They have no notional, or face value.

"I invited him to make a presentation [at Schwab]," said Gorman, the head of the capital markets and trading unit of the San Francisco-based brokerage giant."Our main motivation was to reduce our outrageous Instinet bills. The second motivation was [to have a system] for after-hours trading."

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