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This is a very well though out post. I couldn't agree with it more.
The brokerage profit margins of old - and to a lesser extend, today - are
just too fat and too temping for someone new and hungry and efficient not to
come in and undercut. As Brian Massey correctly points out, they're all
selling essentially the same thing from the same source(s) anyway.
And BTW, I intend no disrespect to those in the brokerage industry. Everyone
is entitled to try to strangle out a living somehow. All of us in whatever
field we operate need to remain aware that life is not static; times do
change, and we need to change with them, or risk being left behind.
Along the same lines being discussed, I think that market data and quote
delivery will eventually become essentially a pure commodity item, like
gasoline or toothpaste. May not be in our lifetimes, but it will happen.
Even in light of the various interlocking "strategic alliances" between
exchanges, data vendors, and software marketers, there's really no plausible
or justifiable reason that I can see for the industry to demand that we pay
several hundred dollars a month for what is an inevitable and natural
byproduct of the the trading system.
Their standard counter-arguments about bandwidth consumption and server
capacity utilization seem to me to be really nothing more than thinly veiled
hedges against lethargy, complacency, and arrogance.
Who knows? Maybe in ten or twenty years we will all have the option of
buying our data directly from the exchanges themselves. Assuming, of course,
that we have elected not to go with a brokerage firm that gives it all to us
for free anyway.
These trends are all clearly established in their earliest stages now, and
the whole process has a name. It's called disintermediation.
Just my 2 cents worth...
Clint
-----Original Message-----
From: Brian Massey <bnm03@xxxxxxx>
To: List, Omega <omega-list@xxxxxxxxxx>
Date: Sunday, November 29, 1998 7:11 PM
Subject: RE: Daytrading article in WSJ
>"Beware of very low commissions....the FILL is the most
>important part"
>
>The age old argument by brokers who want to sell you a Saturn for the price
>of a Lexus....
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