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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May 31, 2002

Exchanges and ECNsStart Dating Game

By Staff Reports.

Several stock regional exchanges want agreements with an ECN, industry sources say, and the American and Philadelphia stock exchanges are two that are said to be in the hunt.

A published report said Philly is working on a deal with GlobeNet ECN. A spokeswoman for Philly confirmed that GlobeNet is seeking a Phlx trading permit.

The courting has gone both ways. In the past few months, Philly has approached several ECNs with a competitive package, which included market data revenue sharing and other services, according to industry sources. Philly said that both sides are interested in each other's business.

The name of the game recently for ECNs has been finding a way to outflank rival Nasdaq. So ECN officials have been talking to exchanges in which they can print trades without going to Nasdaq. The latter continues to insist that trades away from it often are executed in an environment without adequate due diligence.

For the Philly, finding additional sources of order flow may be critical to its survival. It could help bolster flagging seat prices which have tumbled about 35 percent in recent weeks. A handful of seats are said to be now leasing for $1,500 each. That's the price seat owners would pay to cover technology fees if their seats were not used.