'There are now more than 55 equity venues in the U.S.'

By: Ray Pellecchia

File Under: NYSE, NYSE Arca

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So says Tabb Group CEO and founder Larry Tabb, quoted in a brief Securities Industry News article with the wonderfully succinct headline, "Equity Venues > 55."

So much for the NYSE-Nasdaq duopoly we read so much about a couple of years ago. Competition appears to be more alive and well than ever in the equity markets.

Excerpt:

There are now more than 55 venues in the U.S. equities market, according to a recent report from New York-based Tabb Group. "The popular myth that the markets will centralize again is probably incorrect," said Tabb Group CEO and founder Larry Tabb, author of "U.S. Equity Market Structure: Driving Change in Global Financial Markets." With the growing number of execution destinations, noted Tabb, "the way traders now access the financial markets has changed radically."

Tabb said that the markets "actually look like they are going into something we're calling consolidated proliferation,' where you wind up with a single liquidity pool that has two or three different trading models within it. You get the economics of consolidation, but you get the multiple business models ... so that the arbitrage liquidity just doesn't disappear."

The report, which I have not yet seen, also takes a shot at floor trading, saying that with today's smart routing and low latency, calling a broker on a trading floor is like putting horses in the Daytona 500. That's a fashionable thing to say but I don't agree, for two reasons.

First, floor brokers themselves increasingly are getting the technological tools to participate in today's "fast" market, though of course those tools cannot come online fast enough.

Second, there's the real world -- how things really get done. When last measured last fall, there were more than 3,500 outgoing and incoming calls a day on our floor brokers' mobile phones alone. I don't know what that number would be today, but I do know that the 3,500 doesn't include calls from land lines in the brokers' booths, which undoubtedly would add many more to that number. All of those calls ultimately represent communications with off-floor customers, who obviously continue to derive value from talking with their floor brokers.

I'll post some more about mobile phones soon, as there's some news on that front.