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SuperMontage Is Not Enough

Traders Magazine, October 2002

Michael McCauley

It "boggles his mind" why the industry needs an alternative display facility, says STA Chairman Jack Hughes. Contrary to his opinion, competition is good, which is why so many want both the ADF and the SuperMontage. It was competition in the OTC marketplace that allowed the innovative and powerful technological advances of ECNs. It was competition that allowed ECNs to currently capture 57 percent of the daily volume traded in Nasdaq. It was competition that allowed spreads to narrow dramatically, transactions costs to plummet and, most importantly, implicit trading costs to be reduced. That led to better executions. It was competition between ECNs and market makers that forced Nasdaq to scramble to create SuperMontage. And it was competition that forced market makers to change their spread-based business practices to an agency model in an effort to recapture market share and lost revenues.

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