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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Esway who wrote (4699)	10/7/1999 1:55:00 PM
From: Herschel Rubin	Read Replies (2) \| Respond to of 10027

It is interesting that Sanford Bernstein analyst Steve Galbraith has just learned about the threat of ECN's when this has been plastered all over the press for the past two months. He's a fast learner. What he fails to mention is Pasternak has already addressed this issue: The ECN's will have spontaneous liquidity only in the largest 10% of equities. In other words, the ECN model will only function in the MSFT's and CSCO's of the world. Pasternak then said it would in no way put them out of business if they didn't make a market for the largest 10% of stocks. NITE does quite well in the other 90% of the 7000 issues they make a market for. The lower the liquidity of an issue, the higher the spread for NITE. Consider the phenomenal projected growth of the markets. Getting a major percentage of market making activities for a vastly growing market will still ensure growth. Are you listening, Mr. Galbraith, or do you have another agenda with NITE?

To: Esway who wrote (4699)	10/7/1999 2:54:00 PM
From: freeus	Respond to of 10027

reKnight in danger from ECN Its an ongoing story: you have to watch your tech stocks carefully because those "sell"signals as a stock go down may mean there is true competition and a poor future ahead for the company because new tech comes out so fast. This has happened and is happening to Knight: I was a Nite fan at the beginning of the year, but unfortunately bought more at a very inflated price, giving me an average price of 50...I dont think I would see a gain in any reasonable time frame if I kept the stock. Sad but a lesson learned. Dont let a gain turn into a loss...Wm O Neill says and in this case he was certainly right. Freeus

To: Esway who wrote (4699)	10/7/1999 3:13:00 PM
From: gbh	Respond to of 10027

An interesting article. Much of what it says is already coming true. But only for the most actively traded stocks; MSFT, DELL, INTC, etc. These and perhaps 20 others. If one simply watches a Level 2 screen for a day, its easy to see that a lot of trades in these kind of names are matched on ECNs. However, long stretches easily go by where no ECN is present at either bid or ask. So what happens? Does trading stop? Does the spread widen? No, of course not. There are always MMs there to provide liquidity. They are necessary, even in the most actively traded issues. The lesser traded issues (and here I'm talking about stocks that trade maybe < 10M per day) would have unacceptable spreads at almost all times if not for MMs. This article seems to be imply that MMs are dinosaurs with no future. Sorry, as a careful observer of Level 2, I can't see it happening. Just put up a streaming Level 1 quote list, and look at all those 1/16 and 1/8 point spreads. Say good bye to these if the ECN is all we have. Joe Public will not accept this. ECNs do have a place, but it will not supplant the MM, IMO. BTW, NITE having another strong day and volume over 1B at 3pm today. Gary