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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (6720)	3/17/1999 6:29:00 PM
From: TFF	Read Replies (2) \| Respond to of 12617

Not an ECN, firm says Madoff to leverage trading volume Big market-maker Bernard L. Madoff is gearing up to broaden its own electronic trading platform. By Emily Church, CBS MarketWatch Last Update: 4:51 PM ET Mar 17, 1999 NewsWatch Speculation has been building that the New York broker-dealer is preparing to leverage its considerable volume -- the real currency in the electronic trading world is liquidity -- to attract more trades like an electronic commerce network, or ECN. Principal Bernie Madoff said the firm is not building an ECN but is investing in technology for a new trading that they expect to launch next year. ECNs are taking a large share of stock trading in the United States. "We are in the process of building a new trading platform, but it's not a ECN," Madoff told CBS.MarketWatch.com. The trading platform "will be open to all of our 500 customers and a wide range of additional market participants, not just our clients, but eventually open to clients of other brokerage firms." It will be also be based on a decimal system. "It could be an exchange, it could be a broker-dealer system, it could be any number of things," he said. "We're not leaning one way or another." He declined to say which other brokerages Madoff is talking to and whether they approached the Nasdaq stock market. Exchange officials declined to comment. "We're not in a position to say who we are talking to," he said, adding that "everybody we're talking to has an international presence." Reuters Group-owned (RTRSY) Instinet is the biggest ECN. It is responsible for 20 percent of the volume in Nasdaq's top 100 stocks. Instinet's CEO Doug Atkins said last month he had been in talks with Nasdaq stock market and the New York Stock Exchange about linking forces. "Everybody's trying to capture as much market share are they can," said Brian Finerty, director at market maker C. E. Unterberg Towbin. New deal Madoff is one of the bigger market makers around. According to the Nasdaq Trader, Madoff's volume in January was 270 million shares, compared to the exchange's total volume of some 21 billion for the month. Last week, Madoff linked forces with IndivEx, a new electronic exchange from Morgan Stanley Dean Witter's (MWD) Discover brokerage to offer investors the chance to trade stocks in the evening. This platform is a separate deal, he said. "Obviously, this will enhance our existing trading system and enhance other brokerage systems, giving greater price improvement and greater exposure to the interaction of orders," he said. ECNs match buy and sell orders in stocks. Madoff said the firm's trading platform will not function as a matching system, which is based on filling limit orders, but will transmit market orders. Other ECNs include, Bloomberg LP's TradeBook; and Brass Utility, known as Brut, which is run by a handful of Wall Street firms. Goldman Sachs and E-Trade Group (EGRP) in early January each took a 25 percent stake in Archipelago, another ECN.