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Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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November 8, 2005

Big Easy Shops Survive

By Peter Chapman

New Orleans' trading houses are high and dry after Katrina. The trading shops based in New Orleans hardly missed a beat when the levees broke. All four of New Orleans' major equities houses invoked their disaster recovery plans and set up shop outside the city before Hurricane Katrina hit. The firms - Johnson, Rice & Company, Howard, Weil, Inc., Hibernia Southcoast Capital, and Pritchard Capital were operational outside the New Orleans area on Monday, August 29th, the day Katrina made landfall.

"We were watching the hurricane on television from Dallas," said Sherry Craig, a sales trader with Hibernia Southcoast. "We had the weekend to prepare and had practiced disaster recovery last year when Hurricane Ivan hit." Of its approximately 50 staffers, Hibernia Southcoast counts nine in equity trading. The firm normally makes markets in about 35 stocks. For now, though, it is trading all securities on an agency or riskless principal basis. The firm also sought refuge in Dallas but opted to continue making markets in its 28 stocks.

New Orleans' trading houses are high and dry after Katrina. The trading shops based in New Orleans hardly missed a beat when the levees broke. All four of New Orleans' major equities houses invoked their disaster recovery plans and set up shop outside the city before Hurricane Katrina hit. The firms - Johnson, Rice & Company, Howard, Weil, Inc., Hibernia Southcoast Capital, and Pritchard Capital were operational outside the New Orleans area on Monday, August 29th, the day Katrina made landfall.

"We were watching the hurricane on television from Dallas," said Sherry Craig, a sales trader with Hibernia Southcoast. "We had the weekend to prepare and had practiced disaster recovery last year when Hurricane Ivan hit." Of its approximately 50 staffers, Hibernia Southcoast counts nine in equity trading. The firm normally makes markets in about 35 stocks. For now, though, it is trading all securities on an agency or riskless principal basis. The firm also sought refuge in Dallas but opted to continue making markets in its 28 stocks.

Howard, Weil, a firm with 47 staffers, including five equity traders, is conducting its business in Houston until it can return to New Orleans. The move did not disrupt its communications with clients nor with the floor of the New York Stock Exchange, according to president Jeff Parker. "We have a research office in Houston," Parker explained, "which doubles as our disaster recovery site." But the firm later had to move its operations again, from Houston to NYFIX's facilities in Stamford, Conn., to avoid Hurricane Rita.

Pritchard, the 25-person boutique, sent its four sales traders to New York before Katrina wreaked its havoc. Pritchard is actually based in Mandeville, La., on the north side of Lake Pontchartrain. Mandeville was also flooded. Water levels rose as high as 20 feet, according to Tommy Pritchard, president of the firm. "After 9-11," Pritchard says, "the NASD made [members] file disaster recovery plans. A tremendous amount of redundancy came from that, which has worked out great."