Bloomberg, NYSE Tweaks Trading Prices to Appeal to High-Frequency Firms, here.
While the largest exchanges — including NYSE and Nasdaq — employ what’s called maker-taker pricing that pays those providing liquidity on their venue and charges firms executing against those orders, an alternative pricing setup has gained traction over the last couple years.
Four stock markets — BYX Exchange, EDGA Exchange, Nasdaq OMX BX and CBOE Stock Exchange – do the opposite of NYSE, paying traders to execute against orders at their markets while the firms that submitted those bids and offers are charged a fee. CBSX, one of the smallest stock exchanges, pays firms 18 cents, the highest rate, for orders executed immediately.
BYX is owned by Bats Global Markets, based in Kansas City, Missouri. EDGA Exchange is run by Direct Edge Holdings LLC in Jersey City, New Jersey. The companies run two exchanges each, and totaled 20 percent of U.S. equities trading in November.
Nasdaq OMX BX is also altering its pricing in January. It will pay firms executing immediately 14 cents instead of its current 2 cents, and will charge them 18 cents instead of 4 cents for providing orders. That pricing replicates what’s available on CBSX, owned by Chicago-basedCBOE Holdings Inc. and a group of brokers.
CBSX, based in New York, tested the pricing starting in August and expanded it to all stocks in October as it gained volume. In November, CBSX’s share of trading in Citigroup Inc., one of the most actively traded stocks, was 0.9 percent, compared with less than 0.1 percent a year earlier, according to data compiled by Bloomberg.
The Fiscal Times, Who’s Watching the Banks? here. Nice figure displaying the US Gov agencies charged with bank oversight.
Credit Crisis Summaries: Pollack/Alphaville, What five years of crisis history tells us, here. Chicago Policy Review, The View of the Eurozone Crisis From China, here. St. Louis Fed, A Look at Credit Default Swaps and Their Impact on the European Debt Crisis, here. US Treasury, Financial Crisis Response In Charts, here. IMF, Global Financial Stability Report, April 2012, here. Naked Capitalism , Andrew Haldane on the Arms Race in Banking, here. Thoma, 60 Minutes video The Case Against Lehman Brothers, here.
Electronic Publishing: The Atlantic, The Justice Department Just made Jeff Bezos Dictator-for-Life, here. Charlie’s Diary, What Amazon’s ebook strategy means, here. The Register, Apple fights off ebook suit with anti-Amazon defence, here. Carr/NYT, Book Publishing’s Real Nemesis, here.
Cringely, Not your father’s IBM, here. Cringely is on the warpath.
This is my promised column about IBM — the first of several on the topic, all to be delivered this week. The last time I wrote at length about Big Blue was in 2007. I have been asked by readers many times to revisit the subject, something I haven’t wanted to do because it is such a downer. Writing the last time I hoped the situation, once revealed, would improve. But it hasn’t. And so, five years later, I turn to IBM again. The direct impetus for this column is IBM’s internal plan to grow earnings-per-share (EPS) to $20 by 2015. The primary method for accomplishing this feat, according to the plan, will be by reducing US employee head count by 78 percent in that time frame.
Reducing employees by more than three quarters in three years is a bold and difficult task. What will it leave behind? Who, under this plan, will still be a US IBM employee in 2015? Top management will remain, the sales organization will endure, as will employees working on US government contracts that require workers to be US citizens. Everyone else will be gone. Everyone.
Reuters, Man Group to launch computer-driven bond hedge fund, here.
“Traditional fixed income investing (is) unattractive,” Man’s Systematic Strategies unit said in a note, citing “yields close to zero percent, increased credit risk in many government bonds, (and) little upside (and) big downside of being long bonds in (the) current environment.
“Market inefficiencies (are) likely to prevail in fixed income markets, creating investment opportunities.”