Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

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March 1, 2000

Redibook Partners

By Peter Chapman

Spear, Leeds made headlines last August when it announced it would partner with Charles Schwab, Fidelity Capital Markets, and Donaldson, Lufkin & Jenrette in the operation of its REDIBook ECN. The prospect of all those retail orders flowing into the small ECN made the Street take notice.

The deal is now set. REDIBook ECN LLC is now a NASD-approved broker dealer owned by the four partners. SLK will also operate the system. Randy Frankel is a board member as is Lon Gorman from Schwab; Peter Cohan from DLJ; and Bob Mazzarella from Fidelity.

Frankel explains why SLK sold out. "We saw a lot of other ECNs aligning and we felt we needed to partner up as well to add liquidity to the book," he said.

Ranked fourth in terms of shares traded behind Instinet, Island, and BRUT, REDIBook is considered one of the fastest ECNs for trade executions. A TowerGroup report shows REDIBook a close second to Island in terms of round-trip message delivery. On average, it takes a quarter-second to complete a trade on REDIBook and get a report back. That's fast. On Instinet, the slowest of the pack, it takes over two seconds.