Trading Technology

03:22 PM
Kerry Massaro
Kerry Massaro
Commentary
50%
50%

A Note From The Editor

Seth Merrin, Liquidnet's CEO, made two seemingly outrageous comments when speaking at an April trade show on trading technology.

Well, he was right. Seth Merrin, Liquidnet's CEO, made two seemingly outrageous comments when speaking at an April trade show on trading technology. While discussing the NYSE's plans for its Hybrid market, he said, "I have to give the benefit of the doubt that John Thain will come up with something more interesting than this." The audience was shocked that Merrin would make such a statement - as Roger Burkhardt, CTO, NYSE, was a speaker at the event as well. But the crowd also was, for the most part, in agreement.

Two weeks later, Thain and Gerald Putnam, Archipelago' CEO, announced their plans to merge, proving that Thain indeed did have something much more interesting up his sleeve.

Now that the merger news is out, several questions are raised: How will the two companies be integrated, and what will it mean to the industry? Do they plan to keep the two platforms operating separately, as both parties insist that they will, or are they hedging their bet, playing both sides until it is clear which model - auction or automated - will persevere?

I think the merger is a brilliant idea, but I'm also in the camp that believes the NYSE is hedging its bet, particularly now that it has to comply with Reg NMS. It's hard to imagine that the Hybrid will be ready for testing by next April.

If Seth Merrin's second statement - "The NYSE has to become an ECN or an ECN will become the NYSE." - proves correct, then we can say goodbye to the auction model. Although it's too early to determine, as the merger news was just announced last week, I believe that the NYSE eventually will become Archipelago. However, to hedge my bet, it wouldn't surprise me if John Thain had something even more interesting up his sleeve to prove me wrong.

Comment  | 
Print  | 
More Insights
More Commentary
Is There a Watson in Your Financial Future?
How artificial intelligence might affect financial services.
Survey Shows an Urgency to Automate the Back Office
Confluence reports numbers are trending up across the board when discussing the need to automate back-office processes.
7 Pillars of Market Surveillance 2.0
Compliance officers are facing flash crashes, insider trading, market manipulation, and more. Here are seven market surveillance and risk management steps that will help compliance officers sleep better at night.
Stop, Rethink & Recalibrate: A View From Asia Pacific
Technology has made the human element of high- and low-touch trading almost indistinguishable. Brokers can no longer compete on price. Instead, they should build toward user experience and value of outcome.
The Sentient Enterprise: Data Driven as a Strategy, Not a Tactic
Can capital markets take a tip from front-to-back-office customer execution efficiencies and apply it to the investment process?
Register for Wall Street & Technology Newsletters
White Papers
Current Issue
Wall Street & Technology - Elite 8, October 2014
The in-depth profiles of this year's Elite 8 honorees focus on leadership, talent recruitment, big data, analytics, mobile, and more.
Video
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.