Traders, August 1st, 2001
The deterioration in spread-based trading has taken hold like a cancer across trading desks,
eating up revenues, and throwing some traders onto the sidelines. The pain is not spread evenly. A firm deriving a large portion of its revenue from investment banking activities, for instance, is less worried than a major wholesaler. The former often operates a dealer desk as an ancillary revenue source, not as a money-making machine.The latter depends heavily on the revenues generated from order flow.
Many market makers have taken it on the chin with penny pricing. The lackluster stock market doe...
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