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[thepeel]

[sundubuman]

typical NY crap....

unable to even think about Pittsburgh.....


NYC's obsession with Europe will prove its undoing. Cause the likes of Kansas City and Chicago are already creating America's future financial system.....






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Upstart Bats Trading system hits a home run on Wall Street
By Dave Skretta
The Associated Press
Article Last Updated: 03/10/2007 04:32:58 PM MST

Click photo to enlarge
Bats CEO Dave Cummings hefts a promotional bat at the... (Charlie Riedel/The Associated Press )

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KANSAS CITY, Mo. - As the markets dropped sharply in recent weeks, sending volume soaring and backing up trades handled by the New York Stock Exchange, at least one stock market player was resting easy.
Bats Trading, an upstart electronic trading system more than a thousand miles away in Kansas City, said it handled the volatility with none of the glitches that others did.
Bats has quickly become the third-largest stock trader by volume, trailing only the NYSE and Nasdaq Stock Market, thanks to its technology and aggressive pricing. And with new Securities and Exchange Commission regulations designed to ensure that trades are routed to the market that offers the best price, Bats is poised to pull more business away from the NYSE and Nasdaq.
Since founder Dave Cummings set out last year to challenge the two exchanges, volume on his electronic trading platform regularly tops 300 million shares per day, or about 15 percent of what is traded on Nasdaq. Cummings predicts that total will reach 1 billion shares a day by the end of the year.
Recently, the company began the paperwork to become a legitimate stock exchange, a process that could take several years but would level the regulatory playing field with the NYSE and Nasdaq.
''We've just been able to execute our plan,'' Cummings said. ''We're very good at being nimble entrepreneurs.''

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Cummings is a 37-year-old self-styled computer geek who was born just outside Kansas City. He graduated early from Purdue University with degrees in computer and electrical engineering, then went to work for medical software company Cerner Corp.
In 1995, he ventured into the pits at the Kansas City Board of Trade, where he designed a computer system that would automatically do the work of a pit trader, first trading wheat futures and later stocks.
That computer system evolved into Tradebot Systems Inc., which like Bats has headquarters in Kansas City but houses its computer systems in a suburb of New York City, close to Wall Street.
Tradebot took advantage of electronic communications networks such as Archipelago, INET and Brut to quickly execute trades. Unlike traditional exchanges, which act as intermediaries to connect buyers and sellers, ECNs automatically match buy and sell orders at specified prices.
But over the past couple of years, the NYSE and Nasdaq aggressively bought out the ECNs that offered the greatest competition. Cummings opened his own ECN - Better Alternative Trading System, or Bats Trading - about a year ago, with Tradebot one of its first customers.
''I like to move very quickly,'' Cummings said. ''I'm known to be very impatient. I lay out a goal, I break down that goal into steps that can be implemented, and start moving.''
Cummings hopes to capitalize on the trend toward electronic trading that has already led the NYSE to begin phasing out about 20 percent of its floor space.
The NYSE and Nasdaq aren't the only stock exchanges facing new competition, though. Seven investment banks are banding to create a secondary trading platform in Europe called Project Turquoise, which could eventually rival the London Stock Exchange.
Larry Tabb of The TABB Group, a New York-based consulting firm, said two things have allowed Bats to thrive where others have not.
First, Cummings made arrangements with several major electronic marketing firms such as Getco LLC that generate millions of trades without people being involved. That created the volume that attracts other brokers, who can then buy and sell shares more efficiently.
Second, the company has only a couple dozen people in modest offices. Cummings has spent less than $20 million so far, and as a private company, does not have to answer to public shareholders. That has allowed him to offer a pricing structure that includes low base trading fees that are supplemented with large rebates for volume traders.
Although Bats' final price of 2 cents for every 100 shares traded usually undercuts the NYSE and Nasdaq, a special in January offered a rebate larger than the base price, essentially paying broker-dealers to use the Bats system. The company lost about $6 million but attracted more trading to the platform.
Even after prices returned to normal, volume has hovered around 300 million shares per day. A single-day record of 399.9 million shares moved on Feb. 27, the day the Dow Jones industrial average plunged 546 points before ending the day down 416, the largest one-day decline since markets reopened after the Sept. 11 terrorist attacks.
Several broker-dealers have bought into the company, including Lehman Brothers Holdings Inc. and Credit Suisse Group, who trade millions of shares each day in Nasdaq-listed volume and NYSE Group-listed shares.
On Wednesday, Merrill Lynch & Co. added its name to the list, purchasing a minority stake for an undisclosed sum.
''They're going to be one of the winners, and the brokers are realigning to place bets on the winner,'' Tabb said, ''and on the crazy guy who's willing to take on Nasdaq, and eventually the New York, as well.''
Rich Adamonis, a spokesman for the NYSE, said the company does not typically comment on competitors. But he said Bats has been surprisingly successful, and that the NYSE ''welcomes competition in the marketplace.''
Nasdaq spokeswoman Bethany Sherman but pointed to a recent earnings call in which chief executive Bob Greifeld was asked to address the upstart competitor. ''We respect them,'' said Greifeld, adding that he does not believe the Bats pricing structure will allow for long-term growth.
Cummings insists that he is not out only to make a profit, and that he genuinely cares about competition in the market. But he is willing to fight for his share, even if it means pointed attacks at Nasdaq in an e-mail correspondence with customers.
Recently, Cummings said Nasdaq's failed attempt to buy the London Stock Exchange would be the ''biggest financial blunder of 2007.'' Another e-mail claimed ''Nasdaq seems to be getting very close to a total schizophrenic meltdown,'' and that ''they consistently do everything possible to stomp Bats out of existence. [But] everything they do seems to backfire.''
Cummings chuckles at the notion that his upstart company is ruffling the feathers of Nasdaq and the NYSE. ''I got into this market to make $100,000 a year and feed my family and to allow my wife to stay home with the kids. I never in my wildest dreams thought we'd be here at the center of the U.S. equities market.''