customer, we must provide solutions to that institutionalcommunity. The electronic solutions providers must refocus their energies.That is not to forget about the idea of trading that 200 shares at the insidecheaper and faster, and not to stop thinking about five levels of depth whichSuperMontage will get to, as all the ECNs get to today, and as the liquidityconsolidators have been able to do for a couple of years as well. But oncewe can do cheaper and faster executions for smaller orders, we also need toexamine the brokerage side of the business. We need to provide solutionsthat will enhance performance and allow larger trades to be executed moreefficiently.This is not to say that people do not focus on this, and that there aren’tany solutions out there. But a key element is missing. It seems that weeither have people who are providing solutions who do not concentrate onthe commoditized offering of the 200 shares, or people who are onlyconcentrating on the commoditized offering of the 200 shares. What weneed is a way to integrate the two. We are all rowing together. That’s theanalogy. As an electronic solutions provider, you are taking the rightapproach if you can offer technological, value-added services for tradingcomplex orders that simultaneously interact with all the liquidity in themarket.How will we do that? We have been in a NASDAQ-centric world. Thepanel before was typical of the way these conferences and discussionsusually go. They start out in the general sense about order flow, and maybethey are even global in nature. But, eventually, they go right back down towhat is going on in Microsoft. That seems to be how everyone tends tofocus. The electronic solutions that can be provided span across all markets,across all geographies, and possibly all instruments. If you can provide asolution that says I will be able to trade large size in my Microsoft order, Iassume I will be able to trade large size in IBM. If you are looking for away to get to the buy-side, or to get to ultimate liquidity, it is not necessarily
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a market structure issue. It could happen by providing a solution one stepabove the market level.Once you do that, you can do it in the NASDAQ market, in the NYSEmarket, in global markets, and in other instruments. There has been anattempt to go into options trading as well. Single stock futures are on thehorizon. Solutions can really be provided in that way.I want to end with three things that need to be done to get there. Thereare three players who have to act. First, the regulators have to create anenvironment that is open for competition, an environment that will allow allthese players to create, to innovate, to provide valuable solutions to themarketplace. Once the regulators step in, they should realize that they aredoing so to help competition, not to hinder it. The SEC has come a long wayin getting there. The commission is totally focused on issues like this, and itis a good environment for this to happen now.The second player that we need is the buy-side. The buy-side mustcontinue to pressure the solution providers to give value. They must let usknow what the value is. They must pressure the entire industry to make surethat value is provided, not just cost solutions. Not that they shouldn’tpressure for cost solutions to make sure that we get faster and cheaperexecutions. However, there has to be constant pressure to make sure thatvalue also continues to be provided.Finally, the electronic solutions providers must at least take one foot outof the game of ‘how am I going to trade 200 shares quicker?’ They must getback into the realm of providing trading solutions that will deliver value tothe ultimate end user.That is what I have to say. If there are any questions, I will be happy totake them.UNIDENTIFIED SPEAKER [From the Floor]: It seems to me that theone guarantee is that commissions are only going one way. They are goingdown. Island, Archipelago, and NeoNet, internationally, have made thepush to drop commissions in all markets. Is it in Instinct’s future to changefrom being an agency brokerage? It seems that a new model for Instinetcould incorporate traditional services with the current agency brokerage thatyou provide.STEINMETZ: As far as the commission question goes, you are right.They are only going down. It is incumbent upon the solution providers toadjust their cost structure accordingly and to make sure that they cancontinue to compete. As far as where Instinet’s future lies, we will adjust towhatever the market throws at us. Whether it is market structure issues ornew competitive threats, ultimately what we and everybody in our spaceneeds to do is to make sure that we continue to provide solutions. If that
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means changing our model, we will look at doing so as we move down theroad.PAUL DAVIS50 [From the Floor]: I am intrigued by the search for avalue proposition and what people can bring to the table. As markets haveevolved, a number of institutions have tried to level the playing field. Infact, I am against leveling the playing field. I am for tilting the field in favorof me. I say that somewhat facetiously, but in some respects that hashappened in the past. Instinet’s first value proposition was to bring to thetable a system that was tilted to the advantage of the institutions. Over time,even if it is nothing more than the price advantage that they give to thebroker dealers, the system has now tilted in favor of the broker dealers.Posit brought to the table a crossing network that was tilted in favor of theinstitutions. But, over time it also tilted over to the broker dealers, if for noother reason than the way they structure their pricing. It would be great ifsomeone could take the initiative and, once again, come up with a systemthat is not a level playing field, but that is tilted towards me. And theyshould keep it that way.STEINMETZ: Firstly, if everyone else will cover his or her ears, we willtilt it totally in favor of CREF (laughter). Secondly, I think there is a twofront war that needs to be fought. We have to recognize that the northernterrain is a lot different than the southern terrain. The northern terrain is apricing war, and it is providing fast, cheap access to current markets. Thesouthern terrain is a value war. Ultimately, what we need to do, in essence,is to tilt the scale towards the specific customer segment that we aretargeting. We would like to tilt the scale towards the institutions for theinstitutions’ needs, which are different than the sell-side needs. We alsowould like to tilt the scale towards the brokers for their needs. We actuallyhave the possibility of doing both. The player who can do both (this is in asense what you said, Paul) is pricing in one way and adding some value inanother.The player who does both will win. That does not mean that there cannotbe multiple winners. But those who win put up a tremendous barrier to entryto others. The player who needs price can also get access to fantastic qualityliquidity. The players to whom you have delivered value, quality,functionality and product, will also find the ultimate liquidity that they need.If you can marry these two things, price and quality, you will tilt the scale.Lets go back to my ice cream analogy. The problem is, you had your eyeon the ice cream and the next thing you know someone walked in and saidhere is NASDAQ’s model and we started thinking about the bagel. We50
Paul Davis is Senior Managing Director at TIAA-CREF Investment Management.
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forgot to say, ‘let’s keep our eye on the ice cream.’ We have got to get backto value, which means tilting the scale towards the buy-side.
CHAPTER 5: PERSPECTIVE OF THE MARKETARCHITECTSModerator – William Freund, Director, Freund Center for the Study of Equity Markets,Pace University
Michael Cormack, President, Archipelago Holdings
Sanjiv Gupta, Director of Research and Strategy, Bloomberg TradebookJohn Malitzis, Senior Vice President and Associate General Counsel,Citigroup Global Markets51Seth Merrin, Chief Executive Officer, LiquidnetBrett Redfearn, Senior Vice President, American Stock ExchangeRichard Schenkman, Managing Partner, Elm Tree Group52
WILLIAM FREUND: Bob, you covered so much in your panel, you didnot leave much new for us to discuss. But then again, there is that old jokeabout the Dean who calls in the Professor of Economics and says, ‘You havegiven the same exam for 25 years. We have been receiving complaintsabout that.’ And the Professor replies, ‘Don’t you know Dean, that ineconomics the questions are always the same? It is only the answers thatchange’ (laughter).I would like to emphasize the future in our discussion. Let’s start witheach of the panelists taking a minute or two to say how you envisage marketstructure changing over the next three to five years. Then we will comeback to the points and elaborate. Mike, let’s start with you.MICHAEL CORMACK: I was talking to some friends at lunch aboutwhat they think might happen in the marketplace in the next three years.The central theme, from my perspective, is that market structure will becomeless confusing for participants. The past five years have seen the order51
At the time of the conference, John Malitzis was Vice President in the Transaction ServicesDepartment at the Nasdaq Stock Market.
52
At the time of the conference, Richard Schenkman was Chief Executive Officer of Brut.
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handling rules, the expansion of ECNs, new entrants in the exchange space,decimalization, and a lot of different alternative trading systems that havebeen directed at institutional clients. Things are bound to become lessconfusing.We have seen some consolidation in the ECN space. In general, in thenear future, we will see more consolidation in liquidity pools, whether it isNasdaq or New York Stock Exchange pools, or a combination of Nasdaqand an ECN, or some other pools. ECNs, such as Archipelago, aremerging.53 I see that trend continuing. I see the liquidity pools consolidatinginto two or three.There were comments earlier about competition. I am a big supporter ofcompetition. It helps the investment community. I like the competitionbetween the panelists who, on all other days, are trying to kill each othergiving better service to their clients. It would be a sad day if it turns out thatonly one player is a winner. I think Alan Greenspan said that marketsevolve into natural monopolies. That is not such a positive outcome. Thecompetition helps you, and you have to balance that with the fragmentaryaspects.SANJIV GUPTA: I see it a little differently. I will take a U.S. focus,but will present it from a European perspective. That is because I have justreturned from a trip visiting some of the major desks in Europe.It is amazing how unanimous the disdain is in Europe for the U.S. marketstructure. I was struck by the kind of bad-mouthing I heard for the NewYork Stock Exchange’s system, and for the complexities of Nasdaq’ssystem. They point to their own CLOBs as the obvious place where the U.S.will go. In their opinion, it is only a matter of how long it will take us to getthere.Many of the European marketplaces have simple, transparent systems.They basically have a marketplace that is transparent, that looks very clean.It makes it look like retail investors have been protected. However, the 30%,40%, or 50% of the market that resides upstairs cannot trade very effectivelyin that market because their order sizes are very large. The broker dealerslike it because the 30%, 40% or 50% that sits upstairs can be worked fortheir benefit. They get to cross it and to work it over the phone. It is a twotiered marketplace.In the U.S., we have strived over the years to create marketplaces thatallow for the interaction of all types of order flow. This is a messy business.The institutional buy-side has a different set of needs from the retail
53
In May 2002, Archipelago purchased RediBook and by the following September theintegration was completed.
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investor. The sell-side has a different set of needs. The quantitative tradersand the program traders, all have a different set of needs.There may be times when you see some consolidation, when two or threeplayers get together. We have also seen the emergence of new players likeLiquidnet and Harborside+, and some other new systems. Because thespecial needs of the institutional investor are always there, there will bedifferent innovative solutions in the future. From a regulatory perspectiveand from a buy-side perspective, we must recognize that this is verybeneficial. If we were to call for centralization, we would stifle this.JOHN MALITZIS: One thing is for certain. It is impossible to predictthe future. If you had asked me three years ago what our markets wouldlook like in 2002, I could not have answered that question correctly. Andneither could anyone else on this panel.FREUND: Will Rogers once said, ‘It is too difficult to predict,especially about the future’ (laughter).MALITZIS: One thing that I can say for sure is that competition willincrease, and you will see the markets responding. Things will continue tomove faster as technology improves. The focus will be much moreinternational. I know that Nasdaq has been talking about internationalizationfor years, so has the New York Stock Exchange. I imagine that we will seesome synergy occur between markets both in Europe and the U.S.On a pure micro level in Nasdaq, the movement to an order drivenmarket will continue, particularly with the advent of riskless principle andagency trading. I can see that developing in Nasdaq. Many questions havebeen raised over the past year about how market makers can move from animplicit fee to an explicit fee model. I see a lot more movement on theregulatory front in that area. SuperMontage ties into that nicely.FREUND: We will get back to SuperMontage.SETH MERRIN: I can only talk from an institutional perspective. Weare seeing more recognition of the different needs of retail and institutionalparticipants. The problem has gotten so bad, it is quantifiable – by peoplelike Wayne Wagner – and it is no longer possible to ignore. In anenvironment where the market is going up 30% per year, you can push thesethings under the rug. But now they are in the open, right in front of you.These costs are so large that we must do something about them. I foreseea separation of the marketplaces between retail and wholesale. People havesaid, on the previous panel and already on this one, that the exchanges todayare perfectly fine for retail order flow. It is great when a retail player can gointo a marketplace and spend ten dollars for an instant execution that has no
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market impact. But when you have an inverse relationship54 with thewholesaler and the institution pays a premium for size, there is a problem.This is how it works: ‘the larger he is, the more he pays.’ Right?Hopefully the securities market will recognize that every other industrycaters differently to retail and wholesale customers. One does not go to acorner Gap and buy 30 dozen red shirts. The problem in our marketplace isthat everyone has to go to the same store. I do not believe that one store canhandle the needs of both constituencies.FREUND: We will get back to the issues we have raised so far –consolidation versus fragmentation, retail versus wholesale, and some of thenew technologies that are developing. First, let’s continue with openingcomments from the panel.BRETT REDFEARN: I would like to echo what Seth said. When welook at trading on the exchange, we are looking at the evolution of abifurcated market. In the exchange markets you are going to see more of aninside retail market with more automatic execution for smaller orders. Butyou will also be seeing more of an institutional market. For example, in ourNasdaq program (which we will be talking about later), we will bepublishing a secondary outside size quote. This quote will be specificallyfor institutions so that they can see where ‘quantity price discovery’ happens.We want to bring size back into the price discovery process. So I anticipatethat we will see a natural bifurcation between retail and institutional pricing.Another consideration is how exchanges compete. There is thecompetition for trades – the competition for order flow – and the competitionfor listings. I anticipate that where a company lists will become less of anissue, and that competition will intensify more around where a company’sshares trade. For example, the New York Stock Exchange is now tradingETFs and Nasdaq, as was mentioned earlier, will soon be trading some ofthe listed stocks.55 We at the American Stock Exchange will be tradingNasdaq stocks. Who is trading what, and exactly where, is going to be thekey competitive issue, and the listing issue will become less and lessimportant.Third, I would like to point out a theme that I thought would come up onthe previous panel. There is an increasing integration of equities and options54
Seth Merrin notes that the retail investor generally pays more in stock trading than awholesaler. The opposite leads to an inverse relationship.
55
An Exchange Traded Fund, or ETF, is a type of investment company whose investmentobjective is to achieve the same return as a specific market index. An ETF will invest ineither all of the securities or a representative sample of the securities included in the index.Examples include SPDRs and QQQs.
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and different types of products and trading strategies. When you think aboutdifferent ways of providing liquidity, you should think about the linkagebetween the ability to trade an equity and an option on that equity, or even asingle stock future. These linkages will become increasingly important. Theability to do centralized risk management between product types will beimportant in terms of new ways of providing liquidity in an increasinglydifficult trading environment.The last theme that I will discuss is what I refer to as ‘regulatoryharmonization.’ Right now, what we have is the listed market with one setof rules, Nasdaq with a different set of rules and trying to become anexchange, and the ECNs that have a completely different set of rules thatthey have to abide by. Each one of these venues – if not already – willeventually be trading the exact same securities. Eventually, we will have tohave some regulatory harmonization so that all of the different markets will,increasingly, be playing by the same set of rules.RICHARD SCHENKMAN: I agree with Mike Cormack that themarkets will simplify. I just won’t predict when. The other panelists’comments lead us to believe that a highly competitive and complex structurewill get us to the point where a bunch of unbundled choices will drivestructural change. Right now, we have a high degree of focus on the abilityof the investor to access all markets and instruments directly. This shouldforce the agents who provide services to those markets to unbundle theirservices more rapidly. This will produce a whole set of choices in aDarwinian evolution. In fact, this is what we are seeing now.The next issue for us to focus on is repackaging. This involves bringingtogether the diverse execution solutions that are there to satisfy individualneeds. We must bring the services back together much like you would put amall together – with independent providers linked together – rather than asingle department store supplying all things under the one roof. We mustprovide a customized set of solutions to the investor, whether it is anexecution of equities or an execution of other instruments. Doing this willbe the next challenging trend. It will end up simplifying the markets. Butgetting there will be complicated. We will have a very complex marketstructure for a while. That structure will be driven by a bunch of choicesavailable to both individual and institutional investors.FREUND: Thank you. Let’s now get to an issue that has been raisedseveral times here – consolidation and fragmentation. I heard mention thismorning that Nasdaq will trade NYSE stocks, perhaps even this year, on itssystems. Brett, you said that the Amex would trade Nasdaq stocks. Howimminent are these changes? Will we see more fragmentation of trading?
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I also heard the opinion that some of these centers will consolidate, andthat we will have more centralization. Can it be both? Can we get morecentralization and more fragmentation? John, how do you see that issue?MALITZIS: Nasdaq trading NYSE securities? We currently trade themthrough our Inter Market system, through the ITS/CAES system. I thinkwhat you are referring to is trading those listed securities throughSuperMontage. That is not imminent.FREUND: Trading Big Board stocks on SuperMontage is not imminent?MALITZIS: Right. In part, because we would probably need to gothrough plan amendments. The ITS plan governs how Nasdaq and theregional exchanges trade New York Stock Exchange listed securities. Atthis point, we have not determined to amend the plan to trade thosesecurities. Our focus is on getting SuperMontage up and ready for Nasdaq.But long-term, who knows? If the demand is there and the environmentappropriate, we would seek that path out.We think that competition is good to the extent that it forces markets tocompete for order flow, to compete on price and on services. We welcomecompetition from the Amex. However, we are also concerned aboutfragmentation because we would like to serve our customers in the best andmost efficient way. We think SuperMontage will help reduce fragmentation,but the future remains to be seen.FREUND: Brett, what about your plans?REDFEARN: Our intention is certainly not to fragment the Nasdaqmarket any more than it currently is. One of the things that came up in thelast panel was the ability to access markets and to see displayed prices. Ifyou can access the markets properly, then you really do not have the samefragmentation situation. With the tools that are out there today to accessmarkets, fragmentation should not be a problem. At the Amex, we havegone out of our way to make sure that anybody who wants to access ourmarkets can do so. In fact, we even have some materials on the table overthere if anybody wants to know how. The bottom line is, there is nothingabout fragmentation that we see as an issue.FREUND: Your point is that, as long as there is complete and freeaccess, there is no fragmentation, but there is competition.REDFEARN: Fragmentation today is an interesting debate because thereare so many different types of market centers offering so many differenttypes of products. It definitely is not the same as it used to be. Neither is itthe same on the NYSE where there is such a large concentration of orderflow. When you look at the Nasdaq environment, the key is the ability toaccess those markets.FREUND: What do some of you other panelists think? Do you see moreof a trend toward fragmentation, do you see more of a trend toward
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consolidation, or do you see a trend toward competition with a centralizationof information?CORMACK: There are two forces at play. First, there are structuralchanges in the financial services business. In another year, there will befewer brokers than there were two years ago. As exchanges that provideservices to the broker dealer and buy-side communities, we are essentiallyutilities. It is only natural that we will experience pricing pressure.56 Theindustry consolidation is also part of that force at work.The next factor is the explosion of alternative trading systems. The paceof change over the past five years is unsustainable. We will see incrementalchanges; we will roll out new order types. But I do not think we willcontinue to see the same number of ECN players coming into the business.The same phenomena occurred in the dotcom space in which a phenomenalgrowth in the number of new players was followed by a sudden reduction.The trading industry will not continue to make the necessary investment tosupport more products. There is more care and thought involved in theinvestments. All of this will lead inevitably to more consolidation in theECN and ATS space.FREUND: So, you see consolidation, but also increased competition?CORMACK: What we will see is consolidation and probably strongercompetitors. That is because the survivors will be stronger financially, andtheir business models will be proven. This will give us more stability.GUPTA: You have to separate the discussion between listed and Nasdaqbecause we do not have competition in listed.FREUND: Yes, we don’t. May I ask you how come? I have seen someof the statistics that have been referred to here before. Namely, that theECNs do some 30%, 40%, or perhaps even 50% of the Nasdaq business.But they do only a negligible amount of big board business. Please explain.GUPTA: In my opinion, it is a simple fact of regulatory marketstructure. ECNs and ATSs offer a different style of execution that appeals tomany types of clientele. The listed world has something called ITS thatmakes it virtually impossible to offer those different styles of execution.You have to reroute your orders to the New York Stock Exchange or to theother listed exchanges, and then wait 30, 40, 50 seconds for a response. Atthe same time, your own business is offering instant executions. I believe56
There was a price war among the ECNs and various market centers throughout 2002. TheCincinnati Stock Exchange, for example, competing for Nasdaq order flow, offeredrebates to ECNs that reported their trades on the exchange. On another front, ECNs werelowering fees to capture market share. Island, for example, started executing shares for0.10 cents and offered 0.11 cents per shares for liquidity. It became so competitive thatanalysts say the Island pricing package was ultimately responsible for convincing Instinetto purchase its former rival.
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that the ADF proposal,57 which is in front of the regulators, allows foralternative systems to choose between competing in the listed space as ITSpartners, or as non-ITS participants.58That is the key to listed competition in the next couple of years. With theintegration of the quotes, etc., there will be a transition phase. Then you canallow other entities to offer business models that provide different executionstyles. Everybody will be welcome to take the style that appeals to him orher.Traders are doing listed business. But a lot of it is interacting with theprimary limited pools of liquidity.59 Some of it is after-hours and in the premarket hours. The listed market is not that competitive. I speak toinstitutional investors all the time. There is a constant yearning from thebuy-side. Buy-side traders, who have seen the innovations in the Nasdaqmarketplace over the last few years, would love to have some of thosetechnologies and tools to trade with in the listed market. These tools includereserve, pegging and discretion features, which gives traders more ways tohandle large orders.The listed market, as long as the regulators go along with it, will seetremendous competition. The New York Stock Exchange and the otherexchanges are formidable forces, so it will not be an easy fight. But we willdefinitely see more competition.In Nasdaq, we have had an incredibly competitive environment over thepast five years. Now, suddenly, we have Nasdaq, soon to be a for-profitorganization, calling for centralization. They want to be the centralgatekeeper and toll collector of the marketplace. I am not sure that this is agood step. Nasdaq may be successful in centralizing some part of themarketplace in its SuperMontage, but it is not a foregone conclusion. Unlessall participants are forced into it by legal action, it is unlikely that a simple57
Alternative Display Facility, or ADF, is a facility operated by NASD, to collect anddisseminate quotations, compare trades, as well as collect and disseminate trade reports. Itwas introduced as an alternative system for ECNs and other participants that want to tradeOTC stocks away from Nasdaq’s SuperMontage.
58
The NASD, as of early January 2003, was still seeking permission to allow participants totrade listed stocks on the ADF, in addition in OTC stocks, which do trade on the ADF. Aruling was expected in the second quarter. Under the plan for listed trading, which wasearlier rejected by the ITS operating committee, ADF participants could trade inside oroutside the ITS but would have access to ITS members.
59
There is relatively limited trading in listed stocks on ECNs, while the volume of listedstock trading done away from the NYSE is around 20% of the overall volume. Most of thevolume in listed trading, around 80%, occurs directly on the NYSE, the primary market.
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attempt to centralize a marketplace will be successful. The central issue isthat clients need different solutions. A central marketplace won’t cater to allof those needs.It could be that the make up of the marketplace will change over the nexttwo or three years. I suspect that we will have just about as many players,but the players will be different. Some of the current players will merge, andthat will create room for slightly different offerings. The Nasdaq marketwill stay competitive with about the same number of players. Where youwill see the greatest change in the next two to three years, if the regulatorswill allow it, is the listed market.FREUND: I was intrigued reading recently that Island intends to send itsquotes to SuperMontage, but it prints its trades on the Cincinnati StockExchange. That is a slightly different model. Do you see a modeldeveloping that will fragment the printing of trades?GUPTA: Those are just marketplaces competing for the business ofprinting. If the marginal revenue to an organization is $1 higher over there,it is going to appeal to them to go there. We are in a world of predatorypricing.FREUND: Predatory pricing?GUPTA: I think so. In some cases it is virtually predatory, wherebusiness models are predicated on doing something in the future. They arenot predicated on making a whole lot of money right now, which means adesire to extract every incremental dollar. If it means printing tradessomewhere else, they will do that.SCHENKMAN: Listed trading is on a tipping point. There are thingsthat are aligned now, more than ever, that will change the structure of listedtrading. It is not driven by us, the agents. It is driven by the investorsthemselves and by either their satisfaction or their lack of satisfaction withthe current environment.You could go to a conference like this three years ago, and only hearcomplaints about Nasdaq trading. Today at these conferences you hear a lotof complaints about trading on the listed stock exchanges. Block size isobviously a major part of this: The ability to execute large blocks of stockhas been frustrated more on the NYSE than on Nasdaq since the introductionof decimals and penny increments. Nasdaq has done a much better job thanthe NYSE in allowing direct and unintermediated access for the institutionaltrader.These, as well as other changes, are putting pressure on the current listedtrading structure. Sector trading is another change. A few years ago a tradereither traded listed – that is, NYSE or Amex stocks – or Nasdaq stocks.Today, at dealing desks, the same trader is trading AMD and Intel, or IBMand Dell, where the stocks he handles are based on a specific industry or
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sector, rather than on the exchange or market center the stock is traded on.Having the same trader trade stocks in both markets will cause trading toharmonize in the two major market centers.Other factors are putting pressure on listed trading. The focus ondecentralization of markets since the tragic events of September 11. In thissense, fragmentation is good from a risk perspective. Nasdaq market makersthat are exploring making markets in NYSE listed trading is another issue.So all of these things combined are leading, now more than ever, to somesignificant changes in the listed environment.Liquidnet is an example of the changes that we will see. Asdecimalization came in, the need to trade blocks attracted a solution likeLiquidnet, particularly for listed trading. The competition for QQQ orderflow is another example. More volume trades outside of the listedenvironment in the Qs than in the central market.REDFEARN: First, I would like to say something about printing Nasdaqstocks on the