Commentary

Tim Quast
Traders Magazine Online News

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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January 3, 2011

Happy New Year

By Michael Scotti

Why are foreign brokerage firms setting up shop in the U.S.? That was asked by an inquisitive buyside trader at the Traders Magazine Live conference in October. Jay Bennett from Greenwich Associates said if a firm wants to be considered a global broker, it must be in the U.S., where between 40 and 50 percent of the world's market capitalization resides. The question is the genesis of this month's cover story, featuring Nomura Securities International, the U.S. brokerage subsidiary of the Japanese conglomerate.

Michael Scotti, Editorial Director

Nomura is attempting to build a bulge bracket presence in the U.S. and recently went on a hiring spree. The buildup created a stir on Wall Street. Nomura showered a lot of love on some of these new employees in the form of guaranteed contracts. And nothing gets the rank and file more abuzz than guarantees. That type of commitment helped Nomura expand its head count in the U.S. for its cash business to some 450.

Of course it's difficult to build a firm in any environment, but the current one is especially challenging. Staffer James Ramage explains how Nomura believes that its strong global presence is right for U.S. investors as they seek opportunities overseas. James spent considerable time with Ciaran O'Kelly, who heads Nomura's equities effort, and gained insights into the firm's plans.

The SEC this year could offer some clarity on its approach to regulation: Will there be more rules or a tweaking of the current ones? We'll get more answers soon. Fortunately, publications like ours can offer readers the latest news and opinions, while the market structure gurus offer their observations of the current marketplace and analysis of where it is going.

Mark Madoff, had his father not committed the crime of two centuries, would be among the voices now being heard in the discussion on market structure. Last month, Mark took his life, unable to bear the burden of his father's crime--and accusations that he participated in the giant Ponzi scheme. James Duncan, a trading executive in Canada, knew Mark Madoff. He sent a letter to the editor that sheds some light on the person he knew. Mr. Duncan told Traders Magazine that Mark was as knowledgeable as anyone about regulation and market structure. Traders Magazine concurs: We always found Mark helpful. We knew we could rely on him for accurate information and concise analysis. He was also likeable and easy to interview. Two years ago, he left the business under a cloud of suspicion. Sadly, he died the same way. May he rest in peace.

Michael Scotti

Editorial Director

 

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