Jared Dillian
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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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June 30, 2004

Windy City Loses Another Specialist

By Peter Chapman

Another Chicago Stock Exchange specialist has decided to call it quits.

ATD Specialists, a unit of Automated Trading Desk, shut down its Nasdaq-trading operation and is selling its listed-trading unit. ATD executives blame difficulties with the exchange over technology.

"Our whole purpose in getting into the specialist business was to completely automate it," ATD founder and chairman David Whitcomb told Traders Magazine. "But that has proved a lot slower than we thought." The problem was on the Nasdaq side, according to Peter Kent, ATD's chief financial officer. ATD contends it was facing a waiting period of 12 to 15 months before the exchange could meets its technology needs.

"From a technology standpoint, it would've taken significant changes," Kent said. "We didn't see how that business would make economic sense in the near term. We could no longer put up with the losses while we waited." The Chicago Stock Exchange had no comment.

ATD, headquartered in Charleston, S.C., became a specialist on the Chicago when it purchased Chicago Securities Group in 2002. It made markets in 165 names and ranked a distant third behind Rock Island and Dempsey/E*Trade.

The exit of ATD Specialists leaves the Chicago with eight specialists, down from 15 just two years ago. As Traders Magazine went to press, ATD Specialists had 15 employees. Some staffers will remain, including president Tom Lavery.