Commentary

Momtchil Pojarliev
Traders Magazine Online News

Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

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September 1, 2010

The Retail King

By James Ramage

If a technology glitch starts showing up in the data, [Sjostedt] will start addressing it with them, immediately," Montemayor added. "So, some time will go by, and you give them a chance to address it. And at times, you find, it was something with the code. They say: It'll be fixed by Monday. We can choose to route away or stay with them."

Ameritrade regularly uses about five large market centers--wholesalers and exchanges--and about two or three prominently, Nagy said. It keeps an additional five to seven in a pipeline under consideration for later use. As options headline the next priority for Ameritrade, wholesalers that trade both equities and options will be large recipients of the retail broker's flow. Currently, Citadel Execution Services and Citigroup fit this twin bill.

Nagy said that the relationship between Ameritrade and the wholesalers helps keep trading costs low for retail investors. And wholesalers will always have a place in the relationship, he added. "I want to marry retail orders with institutional liquidity, and wholesalers help us achieve this," Nagy said.

Wholesalers say they are competing for Ameritrade's order flow every day, so they can't afford to become too complacent. Ameritrade benefits from the competition, Sjostedt said, and encourages new wholesalers to participate.

"The bar is always going up," said Andy Kolinsky, president of Citadel Execution Services. "If you take your eye off the ball, you could find yourself with less order flow. We have to be analyzing, reviewing, communicating and understanding where we need to be for our clients every day of the week."

Kolinsky said he appreciates how Nagy works behind the scenes and talks to the SEC regularly in representing retail investors. He agreed that Nagy is their biggest advocate.

"There's no one who sits on more panels to push that message to the industry more than Chris," Kolinsky said. "Sometimes he is controversial. But his end goal is always for the benefit of the investing public."

And while Nagy said he appreciates the attention and respect he receives from his peers in the industry, he's well aware of the fact that Ameritrade doesn't service its customers in a vacuum. Relationships always matter.

"It's nice to have the respect," he said. "But at the same time, I never use that in a detrimental fashion, even with our market centers. While I can be very firm, you must have a good business partnership in order to succeed."

 

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