Spear, Leeds Scales Back Amex Business
Wed Dec 31,12:05 PM ET Add Business - Reuters to My Yahoo!
NEW YORK (Reuters) - The specialist trading arm of Goldman Sachs Group Inc. said it sold 12 listings on the American Stock Exchange, in a bid to streamline its business, but one that comes at a difficult time for the No. 3 U.S. stock and options exchange.
Goldman Sachs said its Spear, Leeds & Kellogg unit sold the rights to act as intermediary for trading of options on 12 exchange traded funds and indexes to Performance Specialists.
"This is part of a continuing rationalization of our business on the exchanges," said Goldman spokesman Ed Canaday. Canaday would not disclose the price of the sale. News of the sale was first reported in the New York Post.
The American Stock Exchange could not immediately be reached for comment.
Spear, Leeds' move comes as the Amex is facing a host of issues, including eroding market share.
This month Dutch specialist market maker Van der Moolen Holding left the trading floor.
In November, options trading firm Timber Hill LLC said it would close its specialist operations and cease floor trading at the Amex because it wanted to focus on exchanges "that have shown a greater proficiency of electronic expertise."
In the past year, the Amex's market share in equity options -- contracts that give the buyer the right to buy or sell a stock at a preset price within a set time period -- has declined.
The exchange slipped from its No. 2 spot in equity options volume to No. 3, due to the meteoric rise of electronic options trading on the International Securities Exchange formed in May 2000.
Industry sources said Goldman's move highlights a desire to scale back on trading floor personnel as cheaper, more efficient electronic trading becomes dominant.
"Business has gotten tough," said Andrew Schwarz, senior partner with AGS Specialist Partners.
"The fact that we now compete with people doing their business faster, better and more efficiently through electronic trade has destroyed the margins for the floor traders," he said. "On the other hand, the business is doing well and continues to prosper because of tighter spreads and quicker executions which has had major benefits to the investing public."
The New York-based ISE currently holds the No. 1 spot in equity options volume.
Amex is also the target of an inquiry by the U.S. Securities and Exchange Commission (news - web sites) into regulatory oversight of its options business.
Meanwhile, Amex's parent, NASD, agreed in November to transfer control of the exchange to a group of floor governors who represent the members.
The deal douses the NASD's flirtation with GTCR Golden Rauner LLC -- a Chicago based private equity firm that had agreed in principle to buy the exchange for $110 million.
(Additional reporting by Jake Keaveny in New York and Doris Frankel in Chicago) |
