GREAT NEWS> HANG TOUGH.....Knight-Trimark sees benefit from Merrill online
By Thom Calandra , CBS MarketWatch
Last Update: 1:52 PM ET Jun 9, 1999
Net Stocks
Renegade Reports
SAN FRANCISCO (CBS.MW) -- Knight/Trimark (NITE: news, msgs), the
largest Nasdaq market maker, says Merrill Lynch's foray into online
trading will benefit the fast-growing company. "They need our service,"
said chief operating officer Walter Raquet. "They have to give instant
execution. Seeing Merrill (MER: news, msgs) go online, that makes our
day."
Knight/Trimark, originally a 1995 joint venture of
27 Wall Street broker-dealers, is one of the best
performing Nasdaq stocks of 1998 and 1999.
The company executed 306,000 trades a day on
average in this year's first months. On April 19, it
executed 520,000 trades, a record and about a
quarter of the Wall Street total for the day.
Raquet said he sees as many as 18 million
online trading accounts by the year 2002.
If Knight/Trimark were a stock exchange, it would
be the world's fifth largest, Raquet, an executive
vice president, told an online broker conference
sponsored by Putnam, Lovell, de Guardiola and
Thornton in San Francisco. Raquet said he
expects Merrill Lynch to use Knight-Trimark
technology for its online trading services at the
end of 1999.
Raquet criticized the New York Stock Exchange,
which has out a temporary hold on the notion of
extended trading hours, for slow transaction times and poor price
improvement for individual investors. "We think there will be
tremendous opportunity to take business away from the NYSE," he
said. The introduction of 24-hour Nasdaq trading will not be "a huge
market" for Knight-Trimark at first. "Over time it will evolve," he said.
"As the hours expand . . . we should do more business."
As for the ECNs that hope to benefit from 24-hour trading of securities,
Raquet is skeptical. "We intend to introduce some competition. We
believe we get the best price (for customers)," he said.
Knight/Trimark will launch a Web-based trading product in the autumn,
Raquet said. The company is also working on a product for individual
investors that will improve the purchase or sale price by 1/16, or
roughly 6 cents a share, if the spread between the bid and ask price is
greater than 1/16th.
More Renegade reports from the e-broker conference.
Also: See Wednesday's Renegade coverage of PaineWebber
conference.
Thom Calandra, editor-in-chief, reports from San Francisco.
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