Beat Goes On

Covering the trading industry and its continuing transformation keeps this publication’s staff on its toes. I think Traders Magazine has done as good a job as any, if not better, writing about changes in market structure and putting them into perspective.

This April issue continues that focus. You’ll find an extended feature on how brokers’ algorithms interact with crossing networks and dark pools. Brokers are trying to make accessing them easier through various smart-order-routing strategies. There’s also a separate story on Pipeline Trading and its recent move to restrict algos from its system.

Senior Editor Nina Mehta has now written three big features on the complex subject of crossing nets since last summer. Mehta is as knowledgeable as any non-vendor on this topic. This month’s stories are the result of her boffo reporting-and some two dozen phone calls.

The market structure beat goes on. The old Intermarket Trading System will become obsolete in June, as exchanges go the private-linkage route. With the markets undergoing some turmoil early last month, you might also find of interest a story on the SEC’s Erik Sirri, who broached the possibility of an industry-wide exception to the trade-through rule. Both stories are in Washington Watch.

The news never stops and markets keep on a-changin’. Change is a continuum, and competition is its driving force. That was the case even back in the early days of Nasdaq, when a square deal involved a dealer. You’ll find an insightful interview this month with former Nasdaq head Gordon Macklin, who ran the all-electronic marketplace when it was founded in 1971. The interview is published posthumously-Macklin died earlier this year. Executive Editor Peter Chapman interviewed Macklin in 2001, but the interview was not published at the time of Nasdaq’s 30th anniversary. Chapman dug up his transcribed notes. Here is what we believe is the last known interview with an electronic trading pioneer.

The New York Stock Exchange thinks it might have its own Gordon Macklin. Duncan Niederauer was recently tapped as president of the NYSE. He begins this month. The exec helped to steer Goldman Sachs’ electronic trading strategy. He’s also worked on derivatives.

One of the NYSE’s hallmarks has always been its certainty of execution. Specialists kept the market running smoothly with their capital. But their role has changed under hybrid, as have their profits. With Niederauer’s experience in various phases of the business, it will be interesting to see what kind of future specialists-the role, not necessarily the people-have at the NYSE.