Commentary

Robert Schuessler
Traders Magazine Online News

A Smarter Monkey

In this contributed piece, TIM noted that some traders do better than others when using data that has been run through certain analysis - that is, have used some form of machine learning to assist them.

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In his first public speech, SEC Chair Jay Clayton deviated from his prepared remarks and offered his own "off the cuff" comments on market issues. Do you like this change of pace?




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May 1, 2013

Briefs

By Editorial Staff

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  • Briefs

Deutsche Bank Opens Small-Cap Desk

To get big, sometimes a desk has to start small.

That's the approach Deutsche Bank is taking, reaching for a greater share of trading volume by concentrating its efforts on the small-cap stocks business. To that end, it has opened a new desk that will specialize in small caps.

Deutsche Bank says that while other firms back off, small-caps is a place where the broker can best assist buyside firms in their search for above-average returns.

Enter the new small-cap desk. Steve Smithers, a nearly seven-year veteran with the firm and former Morgan Stanley alum, is head of the firm's small-cap product and oversees the new group. There are several other dedicated small-cap traders on the desk. The firm declined to name them or the exact size of the desk.

Joe Spinelli, head of North America cash equity trading, oversees this new small-cap group and Smithers. Spinelli told Traders Magazine the new small-cap team will be a stand-alone business within the firm's high-touch offering.

The firm provides research coverage on 259 small-cap stocks, or roughly 31 percent of its corporate research offering.

Spinelli added small-cap algos can add value to the execution process, but they often fall short in creating the liquidity that clients seek.

Given the recent inception of the desk, traders will follow the traditional high-touch trading mode: telephony and elbow grease.

-John D'Antona Jr.


 

LeveL Wins Back Customers

Volume begets volume.

That's the thinking behind LeveL ATS's strategy to get more order flow and grow its business. First, build its client book. Then, build the book of orders from each client. That, in turn, will yield more order flow and push trading volumes higher, the alternative trading system operator believes.

Chief executive Whit Conary and his team have been talking to former and potential new clients to get them involved in the dark pool. So much so, that LeveL's client base is back to 98 percent of the level it had achieved before the firm's parent company agreed to pay a fine to the Securities and Exchange Commission in a case involving the protection of information about its customers' unexecuted orders.

Recent data from Rosenblatt Securities reports LeveL's volumes rose 18.7 percent month-over-month to 24.1 million shares in January from 20.3 million shares in December. Moreover, it has grown its market share to 0.37 percent of all consolidated trading volume compared to 0.26 percent last October, a 29.7 percent gain.

Now with clients returning to LeveL and order routing and flow picking up, Conary told Traders Magazine that average daily trading volume for March is running around 45 million shares a day, double-counted, or roughly 65 percent of what it was pre-announcement.

-John D'Antona Jr.


 

SEC Delays Action on 10-Second Reporting

The Securities and Exchange Commission put off a decision to approve a request from the Financial Industry Regulatory Authority, which wants to shorten the time broker-dealers have to report trades done away from the exchanges to 10 seconds.

The SEC has delayed its decision from March 29 to May 13.

FINRA first proposed the reduction in February. Since then, the brokerage community has written letters to the SEC requesting it not approve the rule change. They argue that the change would be costly and impossible to comply with when trading large blocks of shares, which can require manual input of details.