Share of shares

By: Ray Pellecchia

File Under: NYSE

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This Reuters piece quotes none-too-rosy predictions by Sandler O'Neill's Richard Repetto about the Big Board's share of trading.

"The NYSE could find it challenging to keep hold of market share in some of the most actively traded NYSE-listed shares..." the article summarizes.

I post the piece not because I agree or disagree with it but because it mentions the NYSE Hybrid Market, and I want this to be a space for diverse points of view on Hybrid, not just mine. And there's more to the story of our share of trading stocks such as Lucent (can you say internalization?), but I'll get into that in a future post.

"[U]nless the hybrid is effective in retaining/regaining listed market share, stocks will likely trade on electronic trading platforms away from the NYSE," [Repetto] said.

How's that for a little pressure for getting Hybrid right, my Hybrid-building colleagues?

Anyway, I'm not going to offer any prediction of my own. Our lawyers would kill me, and besides, I've seen too many predictions about us proved wrong these last 18 years. But I think it's worthwhile to offer a reminder of John Thain's stated three reasons for building the Hybrid Market:

1) We're responding to some institutional customers who want us to add the choice of trading automatically and anonymously.

2) We're automating much of what we do -- particularly rote tasks, but also creating for the trading-floor brokers and specialists some valuable tools that will enable them to serve customers more efficiently and effectively -- and positioning ourselves to grow our trading volume.

3) We're keeping the price improvement and low volatility that currently make our market the most compelling value proposition, and building items 1 and 2 on that foundation.