Knight/Trimark Group, Inc. Message Board

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Non-Tech : Knight/Trimark Group, Inc.

KCG 20.00

0.0%

Aug 17 5:00 PM EST

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To: Muthusamy SELVARAJU who wrote (1840)	6/26/1999 9:47:00 AM
From: HeatherN	of 10027

Lucky you to be in Hong Kong now, one of my favorite cities.:) I cannot address all your points, I will give you one view on barriers to entry. (FWIW). NITE operates as a market maker and offers tremendous liquidity. Although there will most certainly be a role for ECNs, it requires a huge amount of capital to act as an intermediary. When a large buy order is placed through NITE, they don't have to look for specific sellers at that price. They will use shares that they have or buy from sellers. They take the risk buy covering shares that they may not have, but they also profit from that transaction. An ECN, on the other hand must link specific buyers and sellers and due to the structure of this system, it can be much less liquid. THis is seen not so much with heavily traded stocks such as AOL, INTC etc but with those that may trade much smaller numbers. Each system has advantages, but I doubt that ECNs will overtake MMs. The liquidity needs to be there for orderly market function and NITE provides this. HeatherN

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