Our CEO Duncan Niederauer was just interviewed on PBS’s Nightly Business Report. Sorry for the lack of notice; I knew it was coming but got the date wrong.

NBR co-anchor blogged about the interview here. She says: “The word ‘authentic’ has been overused lately. But it’s about the best word I can come up with to describe the CEO of the New York Stock Exchange who I interviewed for the first time today.” Excerpt:

Niederauer talks and acts like a stock trader. His style is breezy and friendly. Minutes after I shook his hand, we were already talking about his years at Goldman Sachs, his three kids, and why he’s a fan of the Cleveland Indians (His mother is from Brooklyn and doesn’t like the Yankees, forcing him to pick any other team to root for. He was attracted to the underdog Indians.) He’s starkly different from Thain, who is reserved and formal. I found it revealing that Niederauer chose not move into the grand office that Thain occupied — with a combination of antique English furniture and a stock ticker — preferring a more modest space down the hall.

Before and during the interview, Niederauer spoke candidly and directly. It’s refreshing to talk to a CEO who’s unscripted and unrehearsed. He says what he thinks. He even told me that he got in trouble recently for being too candid. At a gathering in Washington DC on the same day that the Federal Reserve slashed interest rates by three-quarters of a percent, Niederauer commented that a half percent cut would have done the job. Well, his off the cuff remark was widely quoted, and he was criticized. His comments were considered inappropriate because he is not an economist. Niederauer told me he’s more careful about what he says now. I just hope he won’t get too careful. It will be a shame if he becomes predictable and programmed like so many American CEOs.

I think I can speak for many who work with Duncan when I say: Predictable and programmed? Rest easy, Susie, not much chance of that happening.

Hey, but Cleveland? I mean, Cleveland? After the Joba playoff game last year, that one bugs this ol’ Yankee fan. Oh well. Guess you have to respect anyone in New York who roots for the Indians and admits it.

Will add to this post a link to the interview when NBR puts one up, which I understand will be around 9ish tonight.

Traders magazine has a survey of buyside traders, pointing to the problems of market fragmentation. Excerpt:

According to the survey, which included 126 buyside firms, slower fills and inferior prices are the major trading issues associated with today’s fragmented market.

At present, the buyside has so many execution venues–exchanges, ECNs and, particularly, dark pools–that their number makes it difficult to reach them all. And having so many venues reduces the amount of information available and makes it harder to trade blocks.

Of particular interest to me was the question, “If you believe fragmentation is a problem, describe the best solution.” The answers:

Use more algorithms, smart-order-routing and DMA — 31%
Develop better connectivity (between dark pools and exchanges/ECNs) — 49%
More regulation — 5%
Use high-touch sales trading — 12%
Use capital — 11%
Other — 5%

There’s a diversity of opinion there, but the overwhelming favorite is better connectivity between exchanges and dark pools, which is exactly what we’re trying to do with our new NYSE Arca dark-routing initiative, MatchPoint, our upcoming joint venture with BIDS, and in Europe, SmartPool.

Exchanges are natural aggregators of liquidity, and we aim to help customers deal with fragmentation by re-aggregating dispersed liquidity. Much more to come on this front.

Hope you had a good Wednesday, folks. Today was an important and solemn day in our history:

Today in NYSE History
09 April 1968 — The NYSE was closed for the funeral of the Rev. Dr. Martin Luther King, Jr.

Traders magazine has a survey of buyside traders, pointing to the problems of market fragmentation. Excerpt:

According to the survey, which included 126 buyside firms, slower fills and inferior prices are the major trading issues associated with today’s fragmented market.

At present, the buyside has so many execution venues–exchanges, ECNs and, particularly, dark pools–that their number makes it difficult to reach them all. And having so many venues reduces the amount of information available and makes it harder to trade blocks.

Of particular interest to me was the question, “If you believe fragmentation is a problem, describe the best solution.” The answers:

Use more algorithms, smart-order-routing and DMA — 31%
Develop better connectivity (between dark pools and exchanges/ECNs) — 49%
More regulation — 5%
Use high-touch sales trading — 12%
Use capital — 11%
Other — 5%

There’s a diversity of opinion there, but the overwhelming favorite is better connectivity between exchanges and dark pools, which is exactly what we’re trying to do with our new NYSE Arca dark-routing initiative, MatchPoint, our upcoming joint venture with BIDS, and in Europe, SmartPool.

Exchanges are natural aggregators of liquidity, and we aim to help customers deal with fragmentation by re-aggregating dispersed liquidity. Much more to come on this front.

Hope you had a good Wednesday, folks. Today was an important and solemn day in our history:

Today in NYSE History
09 April 1968 — The NYSE was closed for the funeral of the Rev. Dr. Martin Luther King, Jr.

We recently filed with the SEC a proposal to make permanent the mobile-phone pilot for the NYSE trading floor. Excerpt:

The permanent incorporation of the Pilot’s provisions will enable the Exchange to continue to provide more direct, efficient access to its trading crowds and customers, increase the speed of transmittal and execution of orders, and provide an enhanced level of service to customers in an increasingly competitive environment. In particular, by enabling customers to speak directly to a Floor broker in a trading crowd on an Exchange authorized and issued portable phone, the proposed rule change will continue what has become a more expeditious and direct free flow of information than the circuitous manner in which information was transmitted prior to the Pilot.

The filing includes a report on the results of the pilot, which I found of interest because I think it speaks to the continuing value of the trading floor. Excerpt:

Currently, there are approximately 400 portable phone subscribers. For a sample week of October 15 through October 19, 2007, an average of 2,518 calls/day were outgoing calls from portable phones issued to Floor brokers and RCMMs [registered competitive market makers]. An average of 960 calls/day were incoming calls to the portable phones. Of the outgoing calls from portable phones, an average of 1,026 calls/day were calls to the booth by Floor brokers and RCMMs, and 1,492 calls/day were calls by RCMMs to the upstairs offices of their member organization and their clearing member organization and calls of Floor brokers. Approximately 41% of the outgoing calls from portable phones were calls to the booth by Floor brokers and RCMMs.

Of the 960 average incoming calls/day received, an average of 337 calls/day were calls to RCMMs from the upstairs offices of their member organization and their clearing member organization and calls to Floor brokers. An average of 623 calls/day were calls received from the booth. Thus, approximately 65% of all incoming calls received were from the booth and the remaining 35% of incoming calls received were calls to RCMMs from the upstairs offices of their member organization and their clearing member organization and calls to Floor brokers. The Exchange believes that the Pilot is operating successfully in that there is a reasonable degree of usage of portable phones. Based on the Pilot, the Exchange has not identified any additional significant regulatory issues to report at this time.

Moreover, there have been no administrative or technical problems, other than routine telephone maintenance issues, that have resulted from the operation of the Pilot over the past few months.

The numbers cited above are a few months old, and may be different today. They also exclude the undoubtedly larger number of calls to and from the brokers’ booths on the floor. No matter what the exact numbers, I think there’s an important point here:

I am of course not privy to these phone conversations, but I know that nobody on an upstairs desk is calling down to our trading floor — or taking calls from the floor — to talk about the weather. There continues to be market color, insight, experience and judgment on the trading floor that are of value to customers. It’s just a phone call away.

We recently filed with the SEC a proposal to make permanent the mobile-phone pilot for the NYSE trading floor. Excerpt:

The permanent incorporation of the Pilot’s provisions will enable the Exchange to continue to provide more direct, efficient access to its trading crowds and customers, increase the speed of transmittal and execution of orders, and provide an enhanced level of service to customers in an increasingly competitive environment. In particular, by enabling customers to speak directly to a Floor broker in a trading crowd on an Exchange authorized and issued portable phone, the proposed rule change will continue what has become a more expeditious and direct free flow of information than the circuitous manner in which information was transmitted prior to the Pilot.

The filing includes a report on the results of the pilot, which I found of interest because I think it speaks to the continuing value of the trading floor. Excerpt:

Currently, there are approximately 400 portable phone subscribers. For a sample week of October 15 through October 19, 2007, an average of 2,518 calls/day were outgoing calls from portable phones issued to Floor brokers and RCMMs [registered competitive market makers]. An average of 960 calls/day were incoming calls to the portable phones. Of the outgoing calls from portable phones, an average of 1,026 calls/day were calls to the booth by Floor brokers and RCMMs, and 1,492 calls/day were calls by RCMMs to the upstairs offices of their member organization and their clearing member organization and calls of Floor brokers. Approximately 41% of the outgoing calls from portable phones were calls to the booth by Floor brokers and RCMMs.

Of the 960 average incoming calls/day received, an average of 337 calls/day were calls to RCMMs from the upstairs offices of their member organization and their clearing member organization and calls to Floor brokers. An average of 623 calls/day were calls received from the booth. Thus, approximately 65% of all incoming calls received were from the booth and the remaining 35% of incoming calls received were calls to RCMMs from the upstairs offices of their member organization and their clearing member organization and calls to Floor brokers. The Exchange believes that the Pilot is operating successfully in that there is a reasonable degree of usage of portable phones. Based on the Pilot, the Exchange has not identified any additional significant regulatory issues to report at this time.

Moreover, there have been no administrative or technical problems, other than routine telephone maintenance issues, that have resulted from the operation of the Pilot over the past few months.

The numbers cited above are a few months old, and may be different today. They also exclude the undoubtedly larger number of calls to and from the brokers’ booths on the floor. No matter what the exact numbers, I think there’s an important point here:

I am of course not privy to these phone conversations, but I know that nobody on an upstairs desk is calling down to our trading floor — or taking calls from the floor — to talk about the weather. There continues to be market color, insight, experience and judgment on the trading floor that are of value to customers. It’s just a phone call away.

Our NYSE Euronext Business Summary for March 2008 came out this morning. Excerpt:

NYSE Euronext reported strong transaction volume growth in U.S. and European trading operations in March 2008, with double-digit increases in trading volume across all of NYSE Euronext’s products and exchanges compared to the same period in 2007 and year-to-date. Additionally, NYSE Euronext’s cash equity exchanges in Europe and the U.S. achieved new all-time quarterly volume records for the quarter-ended March 31, 2008 with 103 million transactions and 191 billion shares traded, respectively.

The rest of the release and an attached table offer a great deal of detail about our cash, derivatives and listings businesses.

This is a recurring news release about all of our markets in the U.S. and Europe, and I can never decide what to highlight from it. So I decided that every month I’ll pick out one factoid that jumps out at me. The factoid of the month for March is:

Average daily volume on NYSE Arca Options increased 67 percent in March 2008 compared with the year-ago month. And that growth exceeds the industry’s 41 percent increase during the same period.

And just for a little Friday diversion, some fun facts about the number 67, courtesy of Wikipedia:

• In a Voronoi diagram created using points from the prime spiral, no prime less than 10242 will have a rounder Voronoi cell than 67. If you know what that means, I am absolutely impressed with you.

• Sixty-seven is the atomic number of holmium, a lanthanide. Again, if you know what that means…

• The Ottawa 67’s are a junior ice-hockey team established in Canada’s centennial year of 1967.

• “Questions 67 and 68″ was a song I now can’t remember from Chicago’s debut album in 1969.

• The registry of the U.S. Navy’s aircraft carrier USS John F. Kennedy is CV-67.

• It also is the highest two-digit number not presently designating any highway in the Interstate Highway System of the United States. So no doggerel from me today listing the cities through which some U.S. highway runs.

• BUT it is the number of the European route E67, the Via Baltica from Prague in the Czech Republic to Helsinki in Finland by way of Poland, Kaunas (Lithuania), Riga (Latvia), and Tallinn (Estonia). And I was trying to come up with a rhyme starting with Helsinki, but the resulting poem was kind of stinky, and I’ve got to get back to work.

Have a good weekend.

Last year at about this time, Bob Wright, co-founder of Autism Speaks, came here to ring the NYSE Closing Bell to mark Autism Awareness Month. Prior to that, my only familiarity with autism was through living next door to a family with an autistic child. I had no idea how widespread this neurological disorder was until I had the honor of meeting Bob and walking him around the trading floor. I remember being surprised at how many members and others on our trading floor — literally, dozens — went out of their way to talk with Bob and share how autism had touched their lives and those of friends and family members. Bob was completely engaged with them, validating their experiences, providing tips on resources, and encouraging them to hang in and keep working.

Bob was back today with his co-founder, his wife Suzanne, to promote the same cause, but now the U.S. has officially declared April 2 World Autism Awareness Day. Among those joining him was my boss, Duncan Niederauer; his wife Alison, who is joining the Autism Speaks board; and their son Liam, 10, who has autism.

Check out this CNBC interview with the group. Chief, you’re good on TV, but you’ve got nothing on your kid.

The Wrights have 25 countries around the world involved today with awareness events, and have moved this cause forward in ways beyond measure. Duncan committed to marking this day every year at NYSE; I can’t wait to see the progress by 2009.

This post has nothing to do with markets; it’s just something I found weird.

Despite the best efforts of my SFTCs (spam-filtering techie colleagues), the Exchanges blog gets a good deal of spam through the comment box. You, gentle reader, never see it here because I cull it out from the comments I publish. The other day, while separating this chaff from the wheat as I was waiting to not be picked to serve on a jury, I was struck by a unique feature of these blog spams.

Blog spams hawk many of the same things that get spammed through e-mail: prescription drugs, porn, penny stocks, etc. But blog spam has something that e-mail spam doesn’t: the introductory compliment.

Virtually every blog spam begins with a comment about how wonderful the blog is, or what a terrific post that was, etc. I guess the fake kudo is an attempt to evade the filters by taking on the guise of a real comment.

Here’s a sample of the spams that came into Exchanges one day last week. Each comment is followed by the pseudonym of the very kind commenter, and the product they were selling. Note, I have not cleaned up any of the grammar or spelling.

The site’s very professional! Keep up the good work! — Odysseus (free web hosting)

Fantastic work! — Alan Mjyml (foreign-exchange trading software)

Here is intresting people… Lets talk! — Themestoclis (porn)

Wow, super site here! — Jana (foreign-exchange trading software)

This is a cool site! Thanks and wish you better luck! Brilliant but simple idea. — Loukianos (free web hosting)

This is one of the best sites I have ever found. Thanks!!! Very nice and informal. I enjoy being here. — Zaharias (porn)

Really great site with alot of good information!! Keep up the good work!!!! — Spyros (free web hosting)

Hi! Guys how you manage to make such perfect sites? Good fellows! — Arion (free web hosting)

This is one of the best sites I have ever found. Thanks!!! Very nice and informal. I enjoy being here. (porn)

Tnx for you job! It has very much helped me! — Liamsmubmar (online music)

Your site is the best one! — Alan Bnrch (foreign-exchange trading software)

Thanks for the welcome I spent 2 hours to find information you have on this site!! — Sheaffica (online prescription drugs)

hi… just droppin’ by your site… it’s really cute… nice work! — Athones (porn)

Ah, if only they really meant it.

Hey, do any other bloggers out there get this stuff?

The “uptick rule,” which once restricted short selling when share prices were falling, is gone but far from forgotten. As discussed on Exchanges last August (links here and here), some have blamed much or all of the market’s volatility on the rescission of the rule.

Today’s Wall Street Journal reports recent events have renewed the discussion. Excerpt:

The subject of this rancor is the “uptick” rule. Until July, investors typically had to wait until a stock was rising before they could wager on its decline. Under this rule, adopted in response to the stock market’s crash in 1929 to inhibit bearish traders, there had to be an “uptick” in a stock’s price before traders could short the shares. In other words, investors could borrow shares and sell them, hoping for the price to fall, only after a trade that pushed up the stock’s price.

After years of academic research suggested that the rule was hindering trading without protecting prices, regulators eliminated the rule last summer, giving a green light to those eager to sell a stock short, even as it was falling.

Some argue that the move unleashed a new era of volatility…

There are some blog posts and other comments on the topic on the Journal’s MarketBeat blog.

Me, I wonder if enough time has elapsed since the rule change to make a historically valid before-and-after comparison — one that can somehow discount the “normal” periods of elevated volatility we see from time to time throughout history. Would love to hear what you think. The comment box below is yours.

The “uptick rule,” which once restricted short selling when share prices were falling, is gone but far from forgotten. As discussed on Exchanges last August (links here and here), some have blamed much or all of the market’s volatility on the rescission of the rule.

Today’s Wall Street Journal reports recent events have renewed the discussion. Excerpt:

The subject of this rancor is the “uptick” rule. Until July, investors typically had to wait until a stock was rising before they could wager on its decline. Under this rule, adopted in response to the stock market’s crash in 1929 to inhibit bearish traders, there had to be an “uptick” in a stock’s price before traders could short the shares. In other words, investors could borrow shares and sell them, hoping for the price to fall, only after a trade that pushed up the stock’s price.

After years of academic research suggested that the rule was hindering trading without protecting prices, regulators eliminated the rule last summer, giving a green light to those eager to sell a stock short, even as it was falling.

Some argue that the move unleashed a new era of volatility…

There are some blog posts and other comments on the topic on the Journal’s MarketBeat blog.

Me, I wonder if enough time has elapsed since the rule change to make a historically valid before-and-after comparison — one that can somehow discount the “normal” periods of elevated volatility we see from time to time throughout history. Would love to hear what you think. The comment box below is yours.