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Thursday December 23, 2:38 pm Eastern Time
Eastbrokers plans Europe e-trading deal, stock up
NEW YORK, Dec 23 (Reuters) - Shares in small brokerage firm Eastbrokers International Inc.(NasdaqSC:EAST - news) shot up on Thursday when the company said its online trading unit is planning a deal with a European firm that would more than double the unit's trading volume.
The online trading unit, Sutton Online LLC, signed a letter of intent with a company called ECN Access Europe S.A./All Trading Brokers Europe A.V., S.A. under which European trades for U.S. stocks would go through Sutton's computer system, Eastbrokers said.
Eastbrokers shares jumped by as much as 60 percent on the news, and in mid-afternoon trade on the Nasdaq the shares stood 1-25/32 higher at 5-1/8. The company's top executive said in a phone interview the jump was clearly related to the announcement of the proposed deal. More than 2.9 million shares had traded, compared with the average daily volume of 54,000.
''We expect to process in excess of 1,000 trades per day through the Sutton Online system in the first six months,'' Ted Myerson, president of ECN Access Europe, S.A., said in a statement.
Electronic communication networks, or ECN's, match buy and sell orders punched into their systems by brokers who subscribe to the service. They also compete with traditional exchanges.
''Our strategy is to get into Europe heavily,'' Eastbrokers' chairman and chief executive, Martin Sumichrast, told Reuters. ''The next big push is going to be online trading in Europe and that is where we want to be.''
Sumichrast added that the goal is for Sutton Online to ''get hooked in with all the institutions and the banks'' in Europe, adding that the software might also be used to trade European stocks within Europe next year.
Eastbrokers bought Sutton last month for an undisclosed amount.
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