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Tim Quast
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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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November 8, 2005

Bernstein's Sector Joys

By Michael Scotti

Famed New York Yankees catcher and philosopher Yogi Berra once said, "You can observe a lot just by watching." Tom Wright, head of global equities at Sanford C. Bernstein, may have heeded those words in the firm's move to sector trading in June.

"Within three or four months, I knew sector trading was the way to go," said Wright, the former long-time Merrill Lynch trading executive who took the reigns at Bernstein in August 2004. Wright said there has been an uptick of trading at the firm since the move. He attributes the increase to sector trading, but also because the firm's algorithmic trading platform is "gaining traction." Bernstein developed its own algo strategies, as opposed to white labeling another firm's, and that's begun to pay off, Wright added.

Famed New York Yankees catcher and philosopher Yogi Berra once said, "You can observe a lot just by watching." Tom Wright, head of global equities at Sanford C. Bernstein, may have heeded those words in the firm's move to sector trading in June.

"Within three or four months, I knew sector trading was the way to go," said Wright, the former long-time Merrill Lynch trading executive who took the reigns at Bernstein in August 2004. Wright said there has been an uptick of trading at the firm since the move. He attributes the increase to sector trading, but also because the firm's algorithmic trading platform is "gaining traction." Bernstein developed its own algo strategies, as opposed to white labeling another firm's, and that's begun to pay off, Wright added.

Bernstein added five sector traders, including Leo Ressa, another former Merrill Lynch trader, who oversees the sector trading effort. There's an immediate benefit in sector trading. Sales traders no longer must deal with the NYSE floor. And that means their entire focus is on clients and the give-and-take with the sector traders, Wright said. The 30 sales traders already had the benefit of having Nasdaq traders for the last three years. Now their trading load has been lightened on the listed side, as well.

"The energy and the intensity level of the desk has been raised, and there's value in that," Wright said. "The upshot is the desk has a centralized spot for liquidity, greater efficiency, better service and there's a better information flow."