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Tim Quast
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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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April 30, 2000

Processing Meltdown Feared on Wall Street

By Sanford Wexler

The heavy share volume on Nasdaq and the Big Board is testing the mettle of trade processing systems, raising fears of a catastrophe.

No major systems blowups are apparent, but there has been continuing stress on one major pipeline - Nasdaq's SelectNet .

While Nasdaq says it is beefing up its network, some traders are anxious. Although the introduction of decimal pricing is stalled, Nasdaq will have to cope with the expected spike in volume once it occurs. At the same time, volume is likely to remain very strong.

Meanwhile, industry vendor BRASS, a unit of Sungard Data Systems, seems to have come out of the recent record-setting volume with flying colors. Although traders say BRASS has had glitches, its recent performance is encouraging. On one trading day recently, BRASS reported no problems as it handled over 2.7 million trades.

Tom King, president of BRASS, said the systems had been tested for the anticipated surge in trading volume. "There is no order management system in the marketplace today, or maybe even globally, that can be compared to the trading volume we can put through the system," he said.

Some traders look at BRASS, the largest order management system on Wall Street measured by Nasdaq volume, as a necessity.

"You have to have it in today's environment to remain compliant," said Greg LeMaster, head trader at Stifel, Nicolaus & Co. in St. Louis, Mo.