Gary, my biggest concern with NITE is not ECNs currently, but rather the eventual changeover to decimal pricing system, which will probably cut margins more. But that will also probably drive more MMs from the market.
Besides, it's my understanding that ECNs will only deal with limit orders....market orders still have to go thru a MM. So, unless we totally eliminate market orders, NITE should be ok. And if anything, the continuing reduction in trading costs (i.e., AXP free trade announcement, EGRP volume discounts, etc) will continue to drive increases in trading activity. That said, I wouldn't want to own any of the OLBs.
Just got my Worth Magazine today, Mike Murphy recommends NITE (target 65), and estimates that NITE makes about 1 cent per share on retail trades and 6 cents per share on institutional trades. So institutional trading is pretty important.
KJ |
