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

To: Gary Korn who wrote (4970)	10/13/1999 10:16:00 AM
From: Gary Korn	Read Replies (1) \| Respond to of 10027

CC cont. Q: 5 to 10 pct. loss due to decimil. how only 5 to 10 pct loss? A: Every exch. in world has a minimum spread rule. The marketplace sets a price, eventually. Likely about a nickel. Anyway, we are not spread dependent, but volatility dependent. If we can control inventory risk against volatility, spread would be totally irrelevant to our metrics. Q: National business order flow? When formal link? A: This is a sig. component. MER could quadruple over the year once it goes fully online. So, tremendous opportunity. For the record, we have a formal link with most firms, and do a lot of business with MER, PW and Smith Barney. For the record, of our top 12 clients, 4 of them are MER, PW, Smith Barney and _______. They have the potential to grow tremendously. Q: ECN investment, why? A: 70 pct. of time, Instinet trade is with a MM. MMs need an electronic vehicle for anonymity. We are a very large user of ECNs. That is to exhaust inventories that we acquire as a result of our inventory guarantees. So, we all need ECNs. We are a partner with BRUT, send a lot of volume to BRUT at savings of 3 to 5MM/year. We lowered costs to under a million by using BRUT. Nobody is sending ANY order flow to an ECN for a customer. Customers will have more say in destination. Some customers may send some order flow to ECNs, but we have definable value added (limit order matching and executing market orders over ECNS), so we are very optimistic they will choose us. Also, the wannabee.com stock exchanges, capital is going into them to buy not an ECN, but a platform to be an electronic stock exchange. I.e., to create an electronic routing exchange.