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Momtchil Pojarliev
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Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

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January 1, 2002

ECNs in Race to Dominate Trading

By Staff Reports

The race among ECNs to dominate trading in Nasdaq stocks could speed up in the coming months as marriage partners Archipelago and Redibook make up ground on industry leader Instinet and, the No. 2, Island.

The partners combined would account for some eight percent of Nasdaq share volume, compared with about 11.6 percent on Instinet, and 10.4 percent on Island. (The volume is based on Nasdaq data.)

"I don't think the Archipelago and Redi merger presents that big of a threat since they still match less than Island or Instinet on a combined basis," said Greg Smith, an analyst at J.P. Morgan. "However, more mergers in the ECN space could definitely tip the scales and start to threaten the primary markets of Nasdaq and the Big Board," he added.

Once the merger is completed, the Redi system will focus on Nasdaq executions, while the Archipelago system will likely be used for matching listed stocks, according to TowerGroup in Needham, Ma.

(Archipelago has also joined forces with the Pacific Exchange to operate as its trading arm.) Goldman is the largest stakeholder in the combined Archipelago and Redi entity. It owns 12 percent in Archipelago, and up to 18 percent in Redi.

Separately, Tower contended that, as decimal pricing reduces the liquidity provided by market makers and as alternative sources of liquidity grow, chances of executions occuring on Nasdaq's planned SuperMontage will diminish.