nach oben

Erschienen in:

2013 | OriginalPaper | Buchkapitel

4. The Needs of the Buy-Side: How Well Are They Being Met?

verfasst von : Moderator Rob Shapiro, Alfred Eskandar, Marie Konstance, Matt Lyons, Mary McDermott-Holland, David Palmer, Alan Hill

Erschienen in: The Quality of Our Financial Markets

Verlag: Springer New York

Einloggen

Aktivieren Sie unsere intelligente Suche, um passende Fachinhalte oder Patente zu finden.

search-config

KI-gestützte Suche

Aus

Abstract

ROB SHAPIRO: You might find it odd that we have a panel entitled, “The Needs of the Buy-side: How Well Are They Being Met?” Why? Because we have only one buy-side person on the panel! We did the pre-conference call and wondered aloud, Oh, poor Matt Lyons, the little lamb on the buy-side, will be surrounded by all these lions! I reminded them, however, that this is an 800-pound lamb. So, I am not quite sure he is at risk.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Technik"

Online-Abonnement

Mit Springer Professional "Technik" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 390 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Maschinenbau + Werkstoffe

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

Jetzt informieren

Vorheriges Kapitel May 6: Lessons Learned and Questions Raised

Nächstes Kapitel New Technology: What Does It Bring to the Table?

The May 6, 2010 Flash Crash saw the Dow Jones Industrial Average plunged about 1,000 points—or about 9 %—only to recover its losses within minutes. It was the second largest point swing, 1,010.14 points, and the largest 1 day point decline, 998.5 points, on an intraday basis in Dow history.

The cost of capital is reflected in the bid ask spread for principal transactions when brokers are using their balance sheet to facilitate block transactions.

NBBO: National Best Bid and Offer, a term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities. Source: Investopedia.

Ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index. It tells the market’s expectation of 30 day volatility.

Volume Weighted Average Price

Transaction Cost Analysis is a detailed examination of the various costs of trade executions including the costs of buying or selling securities, spreads, commissions, market impact and other variables.

For more recent perspective see, New levels of Transparency, The Trade USA, March 120, 2012 http://www.thetradenews.com/USA_Features/The_Big_Idea/New_levels_of_transparency.aspx

Lit markets are, in a sense, functionally opposite to dark markets. In lit markets, prices and trading data are publicly displayed prior to execution, which is not the case in dark markets, or “dark pools.”

NASDAQ OMS Launches First UD Equity Price-Size Exchange, Globe Newswire, September 20, 2010.

See, http://www.msnbc.msn.com/id/39264802/ns/business-press_releases/t/nasdaq-omx-launches-first-us-equity-price-size-exchange/#.T9IcLzVYvUg

This explanation was provided on background only and should not be included as a footnote.

IOI, or Indication of Interest, is an underwriting expression showing a conditional, non-binding interest in buying a security that is currently in registration (awaiting effectiveness by the SEC). The investor’s broker is required to provide the investor with a preliminary prospectus. Source: Investopedia

Seem It’s Gray Out there, Nina Mehta, Traders Magazine, June 2008, http://www.tradersmagazine.com/issues/20_283/101171-1.html?zkPrintable=true

The speaker subsequently explained in a follow-up interview how, in the instance outlined, there is a profit opportunity available for specialists to “free ride” off of the information obtained through the advertisement of the imbalance through the transaction printing to the tape.

McDermott-Holland in a follow-up interview distinguished between real-time report, which reveals a critical amount of trade data at an important stage in the trade cycle, and “real-time” trade reporting at the end of the day. That is an entirely different matter.

SEC Proposes Consolidated Audit Trail System to Better Track Market Trades, SEC Press Release, May 26, 2010. http://www.sec.gov/news/press/2010/2010-86.htm

The ICI is the national association representing US investment managers.

The SEC and CFTC released a preliminary report on the flash crash incident on May 18, 2010. The report gave several working hypotheses, but failed to identify a single cause for the incident. Securities exchanges canceled 21,000 trades that were executed at unexpectedly low prices during the crash. On June 10, 2010, the SEC voted unanimously to enact new rules which automatically stop trading for any stock in the S&P 500 whose price changes by more than 10 % in any 5 min period. Source: Investopedia. http://www.investopedia.com/terms/f/flash-crash.asp#ixzz1zqXiQBGq

For a summary of more recent SEC regulatory action in this matter, see, Two Years After Flash Crash, SEC Still Pursuing New Safeguards, Michael Peltz, Institutional Investor.

http://www.institutionalinvestor.com/Article/3023836/Two-Years-After-Flash-Crash-SEC-Still-Pursuing-New-Safeguards.html

Findings Regarding The Market Events of May 6th, 2010, September 30, 2010. See, http://www.sec.gov/news/studies/2010/marketevents-report.pdf

See, Extra: How High Frequency Trading Grew. 60 Minutes, CBS Newswww.cbsnews.com/video/watch/?id=6945166n

This refers to the ability of market participants to gain advantages in speed of trade execution through advanced technology, specifically the “co-location” of their computer servers near stock exchanges. That in turns lowers so-called latency, a critical factor in high-speed trade executions.

In a study, Rosenblatt Securities attributed this 11 % of volume to Goldman Sach’s SigmaX; Credit Suisse First Boston, Getco and Knight Capital Group.

Investment Technology Group.

Regulation NMS, or National Market System, was enacted by the Securities and Exchange Commission in 2007 to foster competition among US exchanges and individual orders, and to promote fairness in price executions across all exchanges and platforms.

Bloomberg News in January 2011 cited “more than” 40 dark pools, three ECNS and 13 stock exchanges operating in the US.

In other words, as Robert Shapiro explained in a follow-up interview, the low barriers to entry have enabled a plethora of agency brokers to enter the market even though there had been no corresponding rise in trading volume. At times, in fact, there have been periodic declines in volumes.

Lyons elaborated further in a subsequent interview, adding: “I am agreeing that some of the issues that have the buy-side concerned are definitely perceptual in nature. In some sense the perception that liquidity was [once] more readily available was the fact that you could see it and access it. However, there was a cost to that in higher spreads.”

This was the slang term used to describe traders who used the Small Order Execution System introduced by NASDAQ in the wake of the 1987 market crash. SOES was introduced in response to complaints that NASDAQ market makers were not “picking up their phones” to take customer orders during the crash. SOES, however, became controversial since some market participants, notable NASDAQ market makers, accused users of SOES – the SOES bandits – of unfairly profiting at the expense of market makers. Markets makers complained that SOES bandits would make quick profits in the changes in the bid-ask stock price spread at times when the markets makers did not have enough time to update their quotes in fast moving markets.

Automated Confirmation Transaction system.

SEC Issues Concept Release Seeking Comment on Structure of Equity Markets, January 13, 2010. http://www.sec.gov/news/press/2010/2010-8.htm

A six sigma event is defined as a price drop of six times the volatility (or standard deviations) of an asset.

BATS, for Block Interest Discovery Services, is a US-based ATS launched in 2006. BIDS, for Better Alternative Trading System, was launched in the US as an ECN in 2005 and is the operator of two stock exchanges in the US.

Titel: The Needs of the Buy-Side: How Well Are They Being Met?
verfasst von: Moderator Rob Shapiro
Alfred Eskandar
Marie Konstance
Matt Lyons
Mary McDermott-Holland
David Palmer
Alan Hill
Verlag: Springer New York
Buch: The Quality of Our Financial Markets
Print ISBN: 978-1-4614-5591-2

Electronic ISBN: 978-1-4614-5592-9

Copyright-Jahr: 2013
DOI: https://doi.org/10.1007/978-1-4614-5592-9_4

Springer Professional

Abstract

Bitte loggen Sie sich ein, um Zugang zu Ihrer Lizenz zu erhalten.

Sie haben noch keine Lizenz? Dann Informieren Sie sich jetzt über unsere Produkte:

Springer Professional "Wirtschaft+Technik"

Springer Professional "Technik"

Springer Professional "Wirtschaft"

Premium Partner