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December 6, 2006

Making Sense of Dark

By Michael Scotti

You've probably noticed there's been plenty happening on the conference front lately. Traders Magazine's first event, "Block Trading in an Electronic Era," was a great success, attended by more than 140 industry pros in New York on September 27. The feedback has been tremendous, thanks in no small part to a great list of speakers and attendees. You can look forward to our next issue, which will have a recap of the conference.

Last month the Security Traders Association had its own two-plus days of intense content in Scottsdale, Ariz. The topic of crossing networks, or "dark pools," was probably the most discussed subject at the conference. You can read our Industry Watch story, which offers some interesting snippets from the dark-pool panel at STA.

The surge in dark pools is part of the larger transformation of the equities trading industry that's been occurring over the last two years. The changes taking place include the consolidation of exchanges and the rise of the so-called duopoly-the New York Stock Exchange and Nasdaq. Much of this has been spurred by Regulation NMS and the ongoing shift toward electronic trading.

But it appears there's plenty of room for competition, and the main exchanges may not keep their cozy positions for long. This month's cover story, written by Executive Editor Peter Chapman, outlines how upstarts BATS Trading and Direct Edge ECN are making a run at the big boys. Chapman chronicles the price war going on for trading in Nasdaq-listed stocks and the inroads these two firms have made recently.

The evolving market structure changes are something Traders Magazine has been following closely. In September, this publication broke separate stories about two different brokerage groups launching two new crossing networks-BIDS Trading and Level ATS. We e-blasted the stories to readers and the feedback was immediate. It's rewarding for a monthly publication to beat the national financial press on stories that pertain to our readers.

If breaking news is important to you, and you would like to get our e-blasts, go to and sign up. If we e-blast a story, I can assure you it will be worth reading.

As an information source, Traders Magazine needs to be ahead of the curve, to provide thoughtful analysis on equity trading to readers. The complexities of an evolving marketplace for exchanges, brokerage firms, vendors and the buyside present a tremendous challenge. If Traders Magazine can shed light and help its readers to better understand the changing business of equity trading, then we've done our job. I hope this issue helps to accomplish that.

Michael Scotti

Editorial Director