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The Backbone of E-Trading
May 20, 1999 6:04 AM EDT
By Cheryl Peress
Correspondent
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Over the past few years there has been dramatic growth in share and order volume in US equity markets. Contributing factors include high P/E ratios, an increase in the number of discount brokers, a reduction in transaction costs, and most notably the emergence of the Internet.
While electronic trading companies such as Schwab (quote, chart, profile) and E*Trade (quote, chart, profile) have received the preponderance of praise in trading circles, there is one company committed to technological advances in securities trading that has gone by comparatively unnoticed. That company is Knight/Trimark (quote, chart, profile).
The Knight/Trimark Group is the leading market maker for Nasdaq and third market NYSE and AMEX listed stocks. The Knight Securities subsidiary makes markets in more than 6,700 Nasdaq listed equity securities and has an 18.1% market share. The Trimark subsidiary makes markets in OTC NYSE and AMEX listed stocks, where its market share is 40% and 60%, respectively.
Knight/Trimark has attained its leadership position by providing superior execution services to broker-dealer and institutional customers through both sophisticated trading systems and proprietary trading methods.
"The e-commerce market maker is illustrating how the Internet and electronic communications networks can be leveraged to post very impressive growth," said BancBoston in a recent report.
And impressive, it has been. Since the beginning of the year, the company's stock has blown into orbit, posting a staggering 500% gain. A record number of trades, as well as first quarter revenues and earnings growth (344% over first quarter 1998 and 113% over the last quarter) way in excess of analysts' expectations, are responsible for the stunning stock performance.
"In our view the NITE train shows no signs of slowing down in the second quarter of 1999," said BancBoston. "We continue to believe that investors will be rewarded for buying NITE shares."
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