2MAR$,
My thoughts.
Never before has a securities firm opened its limit order book to its clients. WAMEX not only does this, but also displays its orders to the entire world.
LOL, 'never before,' huh. Well, since ECN's are both corporations/LLCs and broker-dealers, I'd consider them securities firms. There are no less than 10 right now, showing their books to their clients, and a percentage of those that make their book available via their websites, etc.
WAMEX reduces Spread Exposure by eliminating the intervention of brokers and or traders.
Eliminating the market makers or proprietary trading firms' quotes will never make spreads SMALLER. In fact, the tightest spread stocks are those in which there is both heavy order flow (leading to market makers' increased activity and reduced spreads) AND ECN quote posting participation. In an illiquid issue that has a dealer spread of, say, 3/4, believe me - eliminating them and leaving a book run only by customer quotes will result in larger spreads and sometimes discontinous markets. IOW, the way to make spreads smaller is to have both market makers' quotes and customer quotes (specifically via ECN, etc.) posted in a given issues' book.
a global "round the clock" Alternative Trading System which may be more powerful than any exchange or trading system now in operation and The WAMEX trading system is bound to become the major alternative to trading securities on traditional markets and exchanges.
This may be possible, but I personally doubt it. I most of all doubt the likelihood of the trading establishment embracing yet another new alternative trading system unless it purely blows away everything else out there. Of utmost importance is not functionality but liquidity, and liquidity begets liquidity. This is why the Island, Instinet, REDI, and ARCA ECN's have grown so quickly and will likely continue to. You want to send orders to where they'll be hit or taken the quickest, and it's VERY unlikely that some new ATS will be the place to find that liquidity (especially when there are major sources already out there).
Simple ideas have been done, taken root, and are out there now (ECN's come to mind). With four or so ECN's dominating the market, and 6 doing far less volume (the lowest couple of which one might call "negligible), it hardly seems the time to add another ECN to the mix unless its' value proposition is just that great.
Other complex non-ECN alternative trading systems have seen low volume and (consequent) liquidity-attracting problems (OptiMark, AZX, @Harborside, et al). Also, the NexTrade ECN is currently (as I understand it) permitting 24-hour trading access, but, that feature doesn't seem to be (at least currently) attracting loads of volume.
This revolutionary trading platform provides investors round the clock access to trade all registered securities at low cost with anonymity across all continents, in any major currency, in nine different languages, and smart order routing to trade on all major exchanges.
"Round the clock" is no major selling point, at least for most Americans thusfar. "Low cost" is relative not only to what is offered by some ECN's (very, very, low cost) but - if indeed across "all continents" - then w/regard to regional economies as well. The "n any major currency" part sounds revolutionary. And "smart order routing" is nothing new, there are at least 3 systems right now that search for best market prices.
I also have to question the "access to trade all registered securities" part. Registered where? Part of the NYSE's proposal to work more closely with the Toronto Stock Exchange involves agreeing to mutual securities registration standards, so stocks could potentially be traded between the U.S. and Canada. This is not in effect currently. Therefore, for this feature of WAMEX to be in effect, some major regulatory hurdles have to be overcome. The U.S. and Canada are just starting, and that because of the NYSE's overtures.
Will WAMEX pressure the SEC to initiate, or does WAMEX forsee the initiation of, global securities registration "across all continents...on all major exchanges"? That's essentially what it would take to make this an operational feature.
So, while this trading system could surely lead to something interesting and beneficial to investors, I personally don't see much at this point to indicate an extremely competitive business model, particularly in light of recent developments with stock markets and ATS'/ECNs.
One thing for sure:
WAMEX has affiliated with companies such as Oracle (Nasdaq: ORCL), NYD2, 1 Web Pl., Netholdings and IBChannel.com to create a new Alternative Stock Market.
Very nice, but it won't mean a damned thing if there isn't some eventual, publicized or unpublicized committment or affiliation by actual, trading broker-dealers or investment management firms leading to some order flow stacking up in the WAMEX book. Period.
LPS5 |
