Thursday, April 16, 2009

Battle for Supremacy Over?

For years now financial journalists have covered the battle between Nasdaq and the New York Stock Exchange in a fight for equities market share. From its onset Nasdaq's all-electronic trading platform gained steady ground over NYSE with its open outcry and specialist model. Chris Concannon, who has headed up many of Nasdaq's technology initiatives since 2003, has always kept his eye on the prize. Beating NYSE. He oversaw Nasdaq's takeover and integration of Brut ECN and Instinet's INET ECN. But more and more of these pesky ECN's and crossing networks kept popping up - BATS, Bids, ITG, Turquoise in Europe.
The electronic edge that Nasdaq had as first mover gave it the lead, there is no question. But Concannon's departure to high frequency trading firm Virtu Financial can only mean one thing. His work at Nasdaq was done. The battle is over, and the playing field is level. Fees and commissions are the next battle ground. The new frontier is taking advantage of electronic trading using high speed algorithms. Taking fractions of pennies from billions of trades. Exploring windows of opportunity with light-speed arbitrage programmes. Let the fun begin.

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