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To: ild who wrote (219577)	2/7/2003 2:09:46 PM
From: ild	Read Replies (2) \| Respond to of 436258

Goldman Sachs Plans to Cut Some 20% of Options Traders By KOPIN TAN DOW JONES NEWSWIRES NEW YORK -- Goldman Sachs Group Inc. will lay off about 20% of the more than 220 traders in its options-specialist and market-making business, as shrinking profit margins continue to take a toll. The cutbacks show how even the largest U.S. options-specialist firm isn't immune to the belt-tightening facing options market makers, which provide liquidity and ensure orderly trading in the options market. This round of layoffs affects just traders in the options side of its floor-trading operation, not stock specialists, said people with knowledge of the matter. Goldman's SLK-Hull Derivatives unit is the specialist in more than 1,000 options classes. With operations at each of the five U.S. options exchanges, it trades practically every one of the most actively traded options, including Intel Corp., General Electric Co., Dell Computer Corp. and the Nasdaq 100 Tracking Stock, also known as QQQ. With the layoffs, SLK-Hull also is expected to relinquish some of the mandates -- or options classes -- for which it is currently options specialist. Details of any such shuffling of specialist books weren't immediately available, and the exchanges are working to reallocate those specialist books to other firms. But the move likely involves only the less heavily traded options classes. As trading volume growth slowed over the past year -- particularly from retail, or individual, investors whose orders are most coveted by floor traders -- many specialist firms have also begun pulling back their operations at the option exchanges. Played out over time, traders say this could leave more option classes, especially the less heavily traded names, listed at fewer exchanges. The layoffs at Goldman were first reported Friday by the New York Post. It also prompted talk among traders that Goldman Chief Executive Henry M. Paulson was disappointed with the SLK-Hull unit, and that the integration of the various acquisitions that formed SLK-Hull wasn't working financially and culturally. A Goldman spokesman denied such talk. "That is completely untrue, and the integration with Spear Leeds & Kellogg and the other options units have been highly successful and profitable," he said. Goldman had made a big bet on the options market-making business when it spent billions to acquire Hull Trading, Spear Leeds & Kellogg and TFM Investments over the past four years to form what is now SLK-Hull.