Commentary

Jared Dillian
Traders Magazine Online News

Was it Worth It?

In this piece from 10th Man, author Jared Dillian discusses how the ETF revolution is less about ETFs and more about indexing; about how people have come to view stocks less as stocks and more as blobs of stocks.

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December 1, 2003

Taking Another Stab, A Lame ATS Retools

By Peter Chapman

NYFIX is making fundamental changes to its much-criticized and loss-ridden alternative trading system, NYFIX Millennium.

As of January 1, NYFIX will permit limit orders sitting on the Millennium book to interact directly with orders at other market centers. Currently, they only interact with orders passing through Millennium en route to the New York Stock Exchange.

NYFIX, a vendor and broker dealer best known for connectivity to the Big Board, is completing routing links to other execution points, including ECNs.

NYFIX is "eliminating the closed environment which has resulted in only a smaller percentage of orders being executed," Millennium CEO Bob Gasser said in a statement.

Millennium executes about 15 million of the 250 million shares that pass through the system daily. That number is significantly less than originally anticipated. Since its launch over two years ago, Millennium has seen its pass-through order flow cut in half and lost nearly $30 million. The ATS is 80 percent owned by NYFIX and 20 percent by a consortium of large broker dealers.

At least one Millennium broker dealer partner has "turned Millennium off," complaining of low fill rates, charges for placing limit orders and the lack of exposure to other sources of liquidity.

The problems at Millennium have led to the departures of at least two key execs in the past year. Dean Stamos, Millennium's co-founder and former president, left for Vie Securities in October 2002. Steve Blatney, head of sales, joined Nasdaq this summer.