well I just read this,
...looking at the interactive nature of brokerage if there were ONE company who processed 75% of those trades the company would trade in stupid multiples whether or not it made money now or planned to anytime soon. But there isn't one...for brokerage, but there is one for banking....I'm really interested in seeing how this plays out.
Message 9184711
Okay, not 75%. But came in with a $0.67 EPS....profit
How huge? Big enough that they account for as much as 40 to 50 percent of all equity transactions, according to Walter Raquet, Knight/Trimark's chief operating officer. Knight/Trimark is executing over 306,000 trades a day, whereas its nearest rival, a Charles Schwab (NYSE: SCH) subsidiary called Mayer & Schweitzer, executes approximately 200,000 shares per day, according to records supplied by the two competitors.
redherring.com
So how do they earn their cash?
Unlike ECNs, which use technology to connect buyers and sellers of stocks and then charge a fee for the transaction, Knight-Trimark actually buys and sells its own blocs of stocks to earn profit. In many cases, the huge market it creates can lower the buy/ask spreads of stock trades even more efficiently than the ECNs.
Knight's profits run about a penny a share on large trades, but the pennies add up on the enormous volume. In March, for example, the company traded 3.6 billion shares of stock, according to Mr. Raquet.
So probably the price will come down some some before next quarter, and someone else might show some interest here. |
