Scudder Kemper Investments is ranked among the top ten buy-side firms in the globe as measured by assets under management and trading volume. The New York-based firm will become even larger with its planned acquisition of London-based Threadneedle Asset Management later this year.

Scudder itself is the successor firm of Swiss insurance giant The Zurich Group and investment manager Scudder, Stevens & Clark, which merged on Dec. 31, 1997.

Scudder's ten-person 24-hour international equity-trading desk in New York runs three shifts: Europe (3:30 a.m. to 2 p.m.), Latin America and Canada (7 a.m. to 5 p.m.) and Asia (6 p.m. to 4 a.m.). The desk is closed on Saturday, reopening Sunday at 6 p.m.

Scudder's international desk is headed by Mike Bellaro, who reports to Peter Jenkins, the overall head of equity trading and managing director at Scudder. For Bellaro, managing the desk means rising at 1:45 a.m. for work.

Bellaro's typical schedule:

1:45 a.m: He wakes.

2: 15 a.m: German market opens. Bellaro telephones German broker "to discuss what's going on in the rest of the market and instruct them on my orders." (German markets open at 2:30 a.m.)

2:30 a.m. to 2:45 a.m: He telephones Jennifer Gaulrapp, who runs the Asian and Far East desk at Scudder.

2:45 a.m. to 3:45 a.m: Drives to work. No ordinary commute, he is in constant contact with his brokers. Later he will be too busy to give them his full attention.

3:45 a.m: He arrives at Scudder's 345 Park Avenue office. Barring meetings, his office day usually ends around 2 p.m. On his drive back home and until 4 p.m., he will stay in touch with Latin American trading.

4 p.m. to 5 p.m: He takes calls at home. Brokers will review their assessment on the day's sector flows and overall market activities.

5 p.m. to 8 p.m: He discusses tomorrow's strategy with the fund managers. Time out? His phone is never turned off, even when he hits the sack by 8 p.m. The call may mean business. M.N.D.

Wrestling with a long tradition of Wall Street competition, Microsoft is dipping into a $1 billion development budget hoping to snatch more lucrative broker-dealer business.

The Redmond, Wash.-based software giant's goal: getting technology departments to reverse their preference for UNIX-based software solutions over Microsoft products.

Wall Street, to be sure, uses plenty of Microsoft systems, including its word-processing software, Microsoft Word, and spreadsheet tools like Microsoft Excel.

But for more than a decade, information-technology staffs almost universally shunned Microsoft products for running large databases and trading systems, and managing other big-ticket projects.

That's likely to change, experts say, thanks to the latest versions, and some good reviews, of Microsoft's high-end operating system Windows NT.

Operating Systems

Microsoft makes three types of operating systems, or platforms: Windows 98, targeted at the consumer market; Windows CE, used in palm-sized PCs; and Windows NT, used in high-end workstations and servers.

So far, Wall Street staffs have generally been happy to use Windows 98-type operating systems on their laptops and desktop computers.

But UNIX-based technology is still the choice for trade stations.

However, the result of using both systems has caused technical snafus. Now Microsoft is betting that it can convince Wall Street to fully convert to Windows NT.

Windows NT would then displace UNIX-based systems, such as Sun Microsystems' Solaris operating system and Novell's NetWare network operating system.

Microsoft is investing about $1 billion on research and development to make sure it continues to be the best and most powerful server available on the market, according to Matt Conners, the financial-services marketing manager at Microsoft.

Firm Switches

One firm betting on Windows NT is First Union Capital Markets, the investment-banking arm of Charlotte, N.C.-based First Union Corp.

In a recent upgrade to its network, the firm opted for an environment running on Microsoft products, with the Microsoft Windows NT Server operating system as its backbone.

First Union hasn't actually abandoned UNIX, however.

"We haven't completely migrated from UNIX to Windows NT. We are using a mixture of Solaris and Windows NT environments. Most of the traders still have Solaris," said Sushil Vyas, assistant vice president in charge of First Union's Windows NT Server infrastructure.

First Union's mostly Sybase databases run on Solaris servers.

"We never replaced Solaris with Windows NT, and Solaris is still used for most of the trading-floor operations," Vyas said.

Windows NT primarily replaced Novell throughout the firm, but did not replace Solaris.

Decision

The decision to replace Novell on the back end with Windows NT was driven by the development of many 32-bit applications for the trading community, Vyas says.

"We looked at Windows 95 with the existing back end. But IPX protocol from the back end [Novell] wasn't very suitable for our wide-area network design," he said.

"Fault tolerance for the network was at the top of our list," Vyas added. "Our traders cannot have computers that go down. Up time is key to our business."

Fault tolerance is the ability to continue uninterrupted when a hardware failure occurs. A fault-tolerant system is built from the ground up for reliability, using multiples of all critical components. These include the "brains" of computers, or CPUs, and its memory, disks and power supplies.

Thus, if one component fails, another takes over without skipping a beat. This is particularly important for trading. If the system crashes for even one minute, millions of dollars of lost transaction volume could occur.

First Union says its motivation for Windows NT is partly economic and partly the ease of use.

"Many of the applications commonly used by our employees including Microsoft Excel and market programs from Bloomberg, Reuters and Telerate are available on the Windows NT platform," Vyas said.

Microsoft's Conner explains that because a large number of software vendors are developing Windows NT-based products, it means traders are not welded to any one system, vendor or service contract.

These vendors include Bridge Information Systems, Infinity Financial Technology, Advent Software and The Frustum Group.

With this open architecture, a trading desk can buy off-the-shelf software from Advent, order a Bridge trading system and install Microsoft office and Internet Explorer.

(Later, a Wall Street professional can simply click on his laptop and read the data aboard the subway, heading home to his Upper East Side apartment in Manhattan.)

Firms no longer have to incur costs associated with mainframe maintenance or contract with outside companies to process their daily transactions.

The advantages are not lost on some of the largest Wall Street trading giants, such as Morgan Stanley, Dean Witter, Discover & Co.

This ease will prove to be the key to the success of Windows NT on Wall Street, predicts Lawrence Tabb, group director at Newton, Mass.-based securities industry consultant and research firm The Tower Group.

Growth

The Tower Group estimates that by 2001, 730,000 Windows NT workstations and 100,000 servers will be used on Wall Street, compared to an estimated 467,000 workstations and 48,000 servers by year end.

Over the same period, UNIX-server sales will plummet from 135,000 in 1998 to 84,000 in 2001, while UNIX-workstation sales will decline to 163,000 in 2001 from 383,000 workstations sold in 1998, The Tower Group estimates.

"The consensus is that Windows NT will be an eventual winner of the server wars, and in every category it would be a dominant player," Tabb said.

Tabb added that The Tower Group collected its data for a proprietary study for industrial giant Hewlett-Packard.

Not Surprised

Tabb was not surprised by First Union's move to the Windows NT platform. The firm, after all, is going to support Windows NT on its desktops, making a firm-wide Windows NT switch a sensible decision.

Prior to installing Windows NT, First Union was running Novell NetWare on its network.

Replacing that with Windows NT underscored a phenomena repeating itself across Wall Street: Windows NT is giving Novell a boot.

Apart from the technology benefits, the biggest benefit is the savings incurred. A UNIX workstation costs more than $25,000, while an off-the-shelf system from Compaq or Dell using Intel's Pentium processing on Windows NT costs half as much.

(Most of the UNIX systems run on specialized microprocessors called RISC processors, which are like SPARC-chips used in Sun machines and Alpha-chips used in Digital Equipment machines.)

Rollout

First Union began a phased rollout of the new network architecture in January 1997 on its equity-trading floor at its headquarters in Charlotte.

The rollout involved about 100 new workstations running Windows NT Workstation and four servers running Windows NT Server. The new equipment served about 140 employees.

To ensure a gradual implementation that would not disrupt trading, a fault-tolerant operating environment was first applied to file and print services.

The second phase of the Windows NT Server implementation earlier this year involved approximately 80 servers servicing about 3,000 employees.

The servers are a mix of Compaq and Digital systems, primarily with dual Pentium Pro processors and some with quad-processor configurations.

UNIX KO'd?

With these low-cost options available for the trading community, should one expect Windows NT to steam-roll UNIX on Wall Street?

Not in the short term, Tabb says. He thinks the Year-2000 bug will partly stall a mass switchover. (Many firms are diverting nearly 30 percent of their resources towards fixing the bug, he says.)

At the same time, the bigger firms are still keeping UNIX as a platform of choice, since they really do not want to take chances before Windows NT proves its mettle.

"Smaller trading floors are looking at Windows NT because they do not have [to worry about] scalability issues," he said, referring to the capacity of a system withstanding outages on increasing trade volume.

Need some proof?

Investment-banking giant Goldman, Sachs & Co. placed fourth on listed volume and seventh on Nasdaq trading volume in mid-year rankings by Boston-based AutEx is still using UNIX machines.

By contrast, First Union, itself a growing regional powerhouse, was ranked 45th on listed volume and 41st on Nasdaq volume.

To the Editor:

Thanks for your July Letter From the Editor ("Houtkin, Act II," July 1998), which was devoted exclusively to my colleague, Harvey Houtkin, the father of SOES and a major force in reducing trading costs for everyone.

The editorial was quick to identify the issue regarding electronic communications network (ECN) fees, but slow to demonstrate Mr. Houtkin's contribution toward improving the quality of the markets with a level playing field for all market participants.

Both Mr. Houtkin and All-Tech Investment Group are proud to have advanced the proliferation and competitive nature of ECNs, and to have eliminated the stranglehold previously enjoyed by one particular ECN.

Your support of Knight Securities for its dishonest refusal to pay for All-Tech's ECN service is incomprehensible. You wouldn't honor subscribers who paid for every magazine except yours any more than you should applaud Knight for paying all ECN fees except for All-Tech's ATTAIN.

If anything, you should have reported Knight's stubborn defiance as reminiscent of the collusive market behavior discovered and previously sanctioned by the Department of Justice and the Securities and Exchange Commission.

Mr. Houtkin and All-Tech Investment Group are eager to further any issues affording traders' universal access, efficiencies and cost reductions.

Mark S. Shefts

President, All-Tech Investment Group

Montvale, N.J.

From the Editor: It is inappropriate to pass judgment on the actions of a broker dealer that does not pay access fees to an ECN. At the moment, there is apparently no compelling legal authority on the matter.

You may have missed the point of my letter. I tried to show how ironic it is that the pioneer of modern electronic day trading, Harvey Houtkin, is now charging access for price-quote information that arguably belongs in the public domain. Once upon a time, he preached about an unfettered access to the electronic equity highways.

Traders Magazine welcomes letters from readers on stories that appear in the magazine, and on other industry topics and concerns. Responses to:

Letters to the Editor, Traders Magazine

40 West 57th Street, 11th floor,

New York, NY 10019

Fax: (212) 765-6123

Greatly improving a process often makes technology more attractive. The best solutions are usually simple and flexible. But sometimes, the solutions aren't so simple, making technology needlessly complicated for users.

The problem is the way technology is applied. Many times we load our systems with unnecessary bells and whistles. The users get confused and the bells and whistles go unused. Demonstrating their prowess, the technologists provide traders with applications that do more than is necessary.

Technologists are missing the point. Technology is merely one tool used by trading desks. Technology is not a silver bullet.

Often we automatically assume that the only solution in this age of information overload is technology. The technologists' response to trading-desk problems comes with multiple monitors, layerings of windows and many double-clicks and keystrokes, sometimes losing sight of the traders' work environment and objectives.

Technologists attempt to impress traders with jazzy solutions, rather than elegant ones. I believe elegance means simplicity, and meets the users' needs.

There is a point of diminishing returns on all technology investments. Sometimes, a vast majority of the costs of applications are spent on features that may go unused. Therefore, the question technologists should ask themselves is, "Should we do this?" and not, "Can we do this?"

Technology's Place

Computers should be used to filter, collate and sort massive amounts of information to help traders perform more and better trades. Computers are not good decision-makers. Artificial intelligence and expert systems are examples of failed, improperly-applied technologies.

In some areas of our business, these types of technology have been very effectively applied. For example, Los Angeles-based Jefferies & Co.'s AE Workstation has simplified the crossing process and automated the clerical aspects of sales trading. Another simple solution was installing EASE, a product made by a New York vendor which allows simultaneous entry of indications and trades into Boston's Thomson Financial Service's AutEx and New York-based Bridge Information Systems.

Mapping the right-sized technology to the problem is as important as the solution itself. Because of the high rate of turnover in technology, it is more important than ever that we make technology investments with an eye to the future. We may decide not to purchase an upgrade, like Windows 98, because of the costs or the impacts to scheduled work.

Even though it may be "new and improved," it may not offer any useful functionality. Technologists and not the vendors should manage upgrades at reasonable paces.

Who's Driving?

In many cases, technological change is driven by forces outside of the firm's control, particularly industry-wide projects. Examples include the Year-2000 computer bug; the National Association of Securities Dealers' Order Audit Trail System, or OATS; settling trades one day after execution, or on T+1; the New York Stock Exchange's goal to have its computers handle four billion shares daily; the European Monetary Union; and decimalization. Not one of these expensive initiatives adds one dollar to a firm's bottom line.

Jefferies' clients are demanding direct access to products and services. The firm is working closely with clients to deliver electronic connectivity like direct access to markets, electronic communications with traders and seamless integration with internal systems.

Some traders may resist these initiatives, viewing them as threats to their relationships. This dichotomy produces a dynamic tension for management trying to prioritize technology projects that meet the customer's and salesperson's needs. Prioritizing and resolving problems adds yet other dimensions of immediacy to the process.

Another issue is how the buyside is requesting connectivity. Sell-side firms must use one of five "standard" Financial Information Exchange, or FIX, formats to communicate. The problem is the standard that resides in a specific firm and not among other buy-side firms. No one vendor or organization owns the FIX protocol.

Technology Philosophy

Jefferies' goal is to provide its traders with the right level of technology. We try to achieve this by becoming true partners with our business units. We aim to act first as advisors, then as technologists.

Due to client and regulatory demands, technology is a large part of the expense structure. Business-unit managers must view technology as a strategic investment instead of a backoffice expense. Efficiency should not be the primary driver.

To be worthy of consideration, business managers must discard the mindset that technology must result in dollars saved through improved efficiencies. A technology investment should focus on more strategic goals, such as providing a competitive edge, meeting customer needs and increasing market share.

Why would a trader feel a new technology solution was a failure while a programmer may feel it was an unqualified success? Why such divergent views?

Traders who are good at building relationships and are fully accountable to their clients frequently work under time pressure. By the same token, technologists view their craft as an art form and focus more on product issues than people issues. Technologists tend to take a product view instead of a solution view of the deliverable. In other words, the product worked fine but the network caused the problem. The user only knows that the technology doesn't work.

Technologists don't expect their products to be 100 percent perfect once out of the box. They expect, and consider it common knowledge, that a burn-in period is needed for each new application. Depending on the complexity, this period can last months. Time is a relative thing. Technologists measure time with a calendar. Traders measure it with a stopwatch.

Need to Change

What's the big deal about technology? Why do we now need to change the way we work together? For one thing, competition and the markets are driving the change. Technology is an important tool to help facilitate the evolution of our industry. In the future, firms that make the smartest use of their technology investments will be more responsive to their clients and adapt better to changing market conditions.

To this end, technologists at Jefferies first seek to understand the problem, knowing that a solution may not involve technology. Then a very focused approach to investment is made to insure that technology dollars are being spent on strategic initiatives. Too many times, technology dollars are wasted. Time, effort and resources are spent on what can be done rather than on what should be done.

One thing is more certain than death and taxes in the arcane world of correspondent clearing: nothing stays the same.

Profound? Not exactly. Deep down, does it give consolation to the dozens of active trading desks scouring the nation regularly for larger broker dealers that will clear and settle their trades? Nope.

But the statement does underscore trading desks’ preoccupation with selecting the most suitable broker dealer, or correspondent clearing firm, to handle their business.

So how do trading desks pick the perfect partner? Is price-per- transaction a useful guide? Not really, some experts say.

“Ticket charges are usually left as opaque as possible,” said Lawrence Tabb, group director of The Tower Group, a Newton, Mass.-based securities-industry consulting firm. “In some cases, that leaves clearing firms room to charge as much as possible.”

Ticket charges typically include the cost of trade processing, margin-balance financing and frills such as extra customer reports.

“If your firm does not need a clearing firm that has international clearing capabilities, then it might be best for you to settle for a small clearing firm,” Tabb said.

What small clearing firms lack in size, they sometimes compensate for in areas such as personalized customer service and hand-holding. Some larger clearing firms, of course, would argue that they can do just as much. “Look at your needs first,” Tabb recommended.

Reforms

A plethora of regulatory reforms, pending rule changes and heavy-duty technology requirements are some of the biggest hurdles facing broker dealers, or introducing brokers as they are known, choosing a larger broker dealer for record keeping, trade financing, processing and other backoffice functions.

On the technology side alone, the large amount of capital tied up in robust computers that can process and record trades, track margin balances and short positions, and interface with the National Securities Clearing Corp. (NSCC) and the Depository Trust Company in New York, does not justify the cost for many small trading firms.

It is this large capital outlay that has pressured many trading desks in the past 12 months to discontinue their self-clearing operations and to sign deals with larger and better-equipped broker dealers.

“In the past 12 months, more self-clearing firms are signing agreements with clearing firms than the combined total of self-clearing firms that did so in the past five years,” said a senior executive with Correspondent Services Corp., the clearing unit of New York-based PaineWebber.

At the moment, several pressing technological hurdles are facing Nasdaq trading desks. One is the Order Audit Trail System, or OATS, made mandatory by the Securities and Exchange Commission on March 16. OATS is a real-time electronic system for gathering and reporting more than two dozen trade details for the NSCC.

To put that in perspective, OATS requires firms to install a system that can process and refine data faster than the current 90 seconds allowed for turning around the same volume of information. Desks will be required to provide the exact hour, minute and second of execution for each trade.

Aug. 1, 1999 is the deadline for sending electronic order data, while all manual or non-electronic orders must be covered by July 31, 2000. The first deadline is March 1, 1999, when orders received by electronic communications networks (ECNs), or at the trading desks of markets makers, must be reported via OATS.

Some firms, to be sure, will probably hum along smoothly in the new environment taking root. But these firms are most likely already equipped with the software requirements involved for OATS. Many others, however, are now mulling deals with clearing firms similarly equipped, or are eating up the costs with in-house systems.

The regulatory climate is unquestionably changing how clearing firms do business. Nasdaq trading desks say one of the biggest changes is the order handling rules. These rules have had a noticeable impact on how trading desks use electronic brokers, or so-called ECNs.

The rules require trading desks to disseminate an investors’ superior limit-order price-quote information to an ECN, to another market maker, or else have the order executed by the desk. The assumption that this would somehow result in increased business for ECNs is not quite true.

While ECNs overall have likely seen an increase in business, the proliferation of new ECNs has cut into the bottom line of long-established players.

At the same time, the cost of executing trades on ECNs has made them a ripe opportunity for progressive clearing firms. Bear, Stearns & Co., the parent of one of Wall Street’s largest clearing firms, is promoting a consortium-supported ECN, STRIKE, among its base of correspondent brokers.

Bear Stearns’ strongest marketing tool may be its pledge to charge substantially lower commissions on executions.

That, of course, could trigger a price war in the short term, but correspondents will not be complaining. “If it lowers our cost of doing business, that’s great,” said one Bear Stearns correspondent, smugly.

Internet Technology

The explosive growth in the use of the Internet on Wall Street for online trading, data distribution and other communications is another technological hurdle for some broker dealers. Firms that have not kept pace and lack the know-how, or do not find in-house systems cost effective, are turning to their clearing brokers for help.

In other cases, large clearing firms have developed state-of-the-art systems that are simply too elaborate for smaller broker dealers to replicate, never mind to ignore.

Pershing, the large Jersey City-based clearing unit of Donaldson, Lufkin & Jenrette, is touting its TelExchange, for example. TelExchange is an interactive voice-response system that enables correspondents and their clients to access real-time quotes and account information, as well as trade equities and options using a touch-tone telephone

Clearing firms distinguish themselves with their technology services. This is evident in how clearing firms report transactions to their correspondents, provide electronic access to their fixed income and equity products, and in the sticky legal domain of compliance.

Indeed, on the compliance side, a rash of electronic services are available. Philadelphia-based BHC Securities provides customized online reporting; PaineWebber’s Correspondent Services Corp. has a trade-monitor system; Chicago’s EVEREN Clearing Corp. has an online tracking system; and Pershing has ComplianceView, an online correspondent-controlled system for monitoring compliance activity.

Compliance

The correspondent clearing business has every reason to be focused on compliance, of course. With the stock markets booming and the Dow Jones Industry Average and Nasdaq composite index scaling new heights, it is not surprising that some stock fraud has been perpetrated by shady characters.

Although the scale of fraud is not believed to be pervasive, affecting the small-cap market and mostly involving a coterie of sleazy bucket shops, it has been enough to set off regulators’ alarm bells.

Correspondent clearing firms that cleared for these outfits were left with black eyes. Although the extent of how much they knew about the wrongdoing of their rogue clients is not exactly clear, the problems spurred the regulators to action.

Most importantly, this has resulted in rule proposals that could change how clearing firms must account for their clients. One of them is a New York Stock Exchange proposal requiring member firms to immediately send all customer complaints about introducing firms to the firm’s regulators, or “designated examining authorities.”

That could place new responsibilities on clearing firms for the conduct of their introducing brokers. Moreover, clearing firms would be expected to offer their introducing firms electronic tools to enhance compliance.

Another proposal would require the NSCC to take a more active role in detecting securities fraud. Under the proposal, the NSCC would get more information from clearing firms and pass on reports of alleged wrongdoing to regulators.

Some clearing-firm experts are skeptical about the rule proposals. “Basically, all the rules will do is clarify the relationship between the introducing broker and clearing firm,” one expert said. “The rules certainly won’t make clearing firms responsible for the practices of their introducing brokers.”

Best Practices

Meanwhile, the Securities Industry Association, spurred in part by the negative fallout from some well-publicized clearing-firm controversies, has formed a panel to develop best-practice guidelines in clearing arrangements.

The panel’s terms of reference include a wide-ranging review on the relationships between introducing and clearing brokers. SIA Board Vice Chairman Richard Pechter, who is chairman of the Financial Services Group of DLJ, will head the panel.

“Enhancing the public’s trust and confidence in the capital markets is our highest priority,” said SIA Chairman Irving Weiser in a prepared statement. “As part of our efforts, industry volunteers have been developing a series of best practices’ to help guide firms and educate industry employees in ensuring that the investor’s interests come first.”

Weiser said that the latest initiative will focus on securities-clearing arrangements.

Consolidation

Clearing remains a potentially lucrative business for well-capitalized broker dealers. Despite a consolidation trend that in the past few years saw the disappearance of some clearing providers, industry experts say there are still enough competitive survivors willing to do good deals with active trading desks.

Morgan Stanley, Dean Witter, Discover & Co., for example, announced earlier this year that it plans to exit its ten-year-old correspondent clearing business, which has cleared for more than 80 introducing brokers. (Morgan Stanley is also planning to sell its global custody business.)

On a smaller scale, Fiserev Inc.’s BHC subsidiary last summer beefed up its clearing operations when it acquired the clearing business of Stephens Inc. “A little research, time and patience can land a firm a good trading deal,” said one expert. “Don’t be afraid to pit one clearing firm’s deal against another clearing firm’s deal.

Paul Pantalena likes to let Wall Street work for him. Pantalena, head trader at Columbus Circle Investors in Stamford, tries to build strong relationships with the broker dealers his desk works with. By trusting certain brokers on the sellside, he feels confident his desk can get the best execution possible.

"My philosophy is that it's a partnership," Pantalena said. "We don't want adversaries. We want the brokers we deal with to be our partners, an extension of Columbus."

Last year, Pantalena's desk worked trades to 140 brokers. But his desk dealt closely with less than 50 of them.

"You have to really work to build strong relationships. Knowing the other side is one of the keys to trading," he said.

Pantalena likes to have his orders traded quickly, helping maximize a portfolio manager's expected return. To have a trade executed quickly, it is important to trust a broker with information, Pantalena said. More than 90 percent of the orders on his desk get executed within the day they are received, he added.

Pantalena claims his desk gets better execution from brokers by being up front with order information.

"You need to be open and direct with a sell-side trader," he added. "A broker will work harder to get you best execution when you're up front and a good partner."

Pantalena has tried to structure his desk with the same open, trusting philosophy that characterizes his dealings with brokers. Pantalena, two senior traders and one junior trader handle executions for the seven Columbus portfolio managers overseeing the firm's seven mutual funds.

Columbus is a subsidiary of the Pacific Investment Management Company, a Newport Beach, Calif.-based institutional money manager with more than $125 billion in assets under management. (Columbus has $10.5 billion in assets under management.)

Pantalena has been at Columbus since 1993, and has headed the desk for the last three years. His goal when taking over the desk was to structure a good environment for his traders.

"You're on the desk almost as much as you're at home, so I want my traders to be comfortable," Pantalena said. "I don't lead with an iron fist. I give my traders key responsibilities and trust that they do a good job."

His traders handle all products, not specializing in specific areas of the industry. Pantalena wants his desk to understand many aspects of the market, and working across product areas helps bolster that understanding.

When he took over the desk three years ago, one of his first initiatives was getting the trading desk involved in meetings with other departments at Columbus. Pantalena's desk now sits at meetings almost every week with portfolio managers and the research department. He said knowing how other departments approach their business allows the trading desk to be more efficient with orders.

"Each ticket has an objective," Pantalena added. "You can't always meet that objective if you don't know what it is."

Pantalena is also implementing a new order-management system that will eliminate much of the clerical work that can bog down the desk. He expects the system which he declined to name to go live in October.

He's been pushing for a paperless trading environment since he joined Columbus because he wants his traders to have more time to learn on the desk.

"The new system will allow us to be more interactive," he said. "We'll be able to stay more informed about the business."

Pantalena models his open, up-front management style on what he learned on the two desks he worked at before joining Columbus.

He started trading in 1985 at GE Investment Corp. in Stamford, working on the desk there for six years.

In 1991, he moved over to Equitable Capital, and began the daily commute into New York from Connecticut's Fairfield County. He stayed at Equitable only a year, leaving when the firm was planning its merger with New York-based Alliance Capital.

"I had great desk heads at GE and Equitable," Pantalena said. "They taught me a lot, and they trusted me and gave me independence. I brought a lot of what they taught me to Columbus."

Pantalena likes being back in Stamford, closer to his home in nearby Easton a quiet Connecticut town just north of Fairfield.

"Stamford is a real booming city, and a lot of big companies have their operations there," he said. "And I like that I can get home from work earlier."

Getting home earlier means having more time with his wife and three young children.

"Going home is a lot of fun, and it should be," Pantalena said. "But I also want to make sure that going to work is a lot of fun too. I want my traders to enjoy coming to work every day."