Richard Repetto
Traders Magazine Online News

Why Do Exchanges Own Multiple Licenses? It's Not Hard To See, Look at the SEC

In this recent research note, Sandler O'Neill + Partners, L.P. Principal Richard Repetto examines why the public exchange operators hold multiple licenses and that rationale behind this phenomenon.

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February 1, 2000

Cover Story - Playing Like the Market Pros

By Sanford Wexler

An interactive program called Head Trader allows business school students and ordinary individuals, to find out what it might be like working as a market maker. Best of all, the players do not even have to set a foot on a real trading floor.

They can simply boot up their personal computer and log onto Nasdaq's University Outreach web site (, clicking Head Trader.

If you are not already a market maker, keep your ego in check. Not everyone is an instant pro.

"Do not feel bad if you get a low score the first few times you try the game," the Head Trader site intones. "Learning how to be a good trader takes practice. Play the game a few times to see which strategies work best. You will improve over time."

Worried about best execution? "As in real-world trading of Nasdaq stocks, customer orders in Head Trader receive execution at the best price available ("best execution")," the Head Trader site says.

Head Trader is based upon software that was developed by Robert Schwartz and Bruce Weber, faculty members at the Zicklin School of Business at Baruch College.

The game's visual display is similar to what a Nasdaq sell-side trader sees on his or her screen everyday. The student assumes the role of a market maker in a dealer market, buying and selling securities to make a trading profit. At the end of the game the students can print out their trading summary and score as well as get a listing of every trade they made during the game. The score is based on several factors, such as profit, inventory risk, and trading activity.

Christine Niles of Nasdaq's investor and university programs, said that Head Trader will be regularly updated to incorporate the many changes in the industry, including decimalization and the pending supermontage proposal. "The new web pages will mimic what the dealer screen looks like," she said.