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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April 30, 2001

Another Nasdaq Vet Takes a Final Bow

By Peter Chapman

The Nasdaq world lost a veteran mar ket maker in March when Phil Benizzi retired from Credit Suisse First Boston.

Over a 40-year period, Benizzi sat on four desks, witnessed the creation of Nasdaq, survived the crash of 1987, saw spreads whittled to almost nothing and tasted the early days of decimalization. The 57-year-old Long Islander says he wants to be remembered as a trader willing to take on responsibilities beyond making his markets.

"I've always taken a leadership role," he said. "I've always made a point of helping the less-experienced younger people." To Benizzi that meant identifying what the markets were about; knowing the customers' needs; knowing when to react and when not to react; and managing risk.

The trader got his start in 1961 as a trainee at Merrill Lynch. He spent 24 years with the Thundering Herd (Merrill's nickname since the 1940s), eventually rising to assist desk head Hugh Quigley. His tenure in the upper ranks of one of the largest Nasdaq desks made him a valuable commodity.

Prudential Securities tapped him to run its desk in 1985, but Benizzi resigned a year later to run Dillon, Read's desk.

He chose the boutique bank because of its small size, but says he eventually felt he needed to work for "a more aggressive firm." Dillon, Read was never very active in the secondary market, according to industry sources. Now subsumed into UBS Warburg, it ran a Nasdaq desk mainly to facilitate IPOs.

Benizzi jumped to CSFB in 1991. He moved into telecom stocks when the desk reorganized along market sector lines in 1996. "We took the lead in sector trading," he said of the now common strategy. "We were ahead of most firms."