Day 2: Morning TD Ameritrade Speakers

Ricky attended the TD Ameritrade Institutional National Conference in Orlando and below are highlights from day 2 morning speakers and sessions.  This includes a conversation with Terry Bradshaw and session on “dark pools”.

Terry Bradshaw
Four-time Super Bowl Champion and co-host of Fox NFL Sunday.  High points from his motivational speech:
• Be nice, smile a lot, be prepared, have a great attitude.
• Take charge of the day, life is short, we will die, we are checking out of here, why be average?
• Want to get ahead in 2010? Take charge of yourself and smile a lot.
• The only thing we can control is us.
• Keep things in perspective.   Keep things simple.
• Everything starts with us.  Successful people figure it out.
• Say thank-you to somebody else, study the heart of others.

Patrick Lencioni
Author of “5 Dysfunctions of a Team” and President of a management-consulting firm focused on organizational health. 
“People need to be reminded more than they are instructed.” – Samuel Adams
• Keep things simple.
• Two requirements for success:
  1. Has to be Smart (Strategic, Marketing, Finance, Technology)…left brain.
  2. Has to be Healthy (minimal politics, minimal confusion, high moral, high productivity, low turnover)…right brain.
• Healthy organization
• Build and maintain a cohesive leadership team.
• Create organizational clarity
• Over-communicate clarity.
• Reinforce clarity through Human Systems.
• Team work is a strategic decision.
• The Five Dysfunctions of a Team (good size of a team is 3-9 people):
  1. Absence of Trust.  Solution: leader has to go first.
  2. Fear of Conflict.  Solution: mine for conflict.
  3. Lack of Commitment.  Solution: force clarity and closure).
  4. Avoidance of Accountability.  Solution: confront difficult issues.
  5. Inattention to Results.  Solution: focus on collective outcomes.

Flash Orders, Dark Pools, and High Frequency Trading
Christopher Nagy, Managing Director TD Ameritrade

What are the current trading themes today?
• Dark Pools.
• Non-public trading interest (dark pools).
• Hidden liquidity dark pools provide.
• Useful for institutions who desire to buy/sell a large stock holding without adversely affecting the stock price in the public stock exchanges.
• ATS’s or Alternative Trading Systems
• Creates “dark pools”.
• Highly computerized trading mechanisms.
What is the trading landscape today?
• Ten stock exchanges, four big ones.
• Seven option exchanges.
• 53 Dark Pools (ATS’s).
  o Dark pools gaining share and no end in sight.
• Result: creates a fragmented market (in 2005, NYSE made 75% of trades; today 28%).
Are these practices bad?
• Symptoms of our evolutionary market structure.
• Our markets operate more efficiently than ever before. 
  o 1987 market crash, took days to unwind and post trades.  2008 crash, complete by end of day trading.
• High frequency trading and co-location.
  o Horse and buggy used to deliver trades from one place to another, then came telegraph.
  o Telegraph killed the “horse and buggy” method and fear of manipulation, but market got better.
  o Now orders placed quicker at lower cost.
  o Execution speed in 2003 was 8 seconds per trade, now 2 seconds or less.  Pure improvement is 80% factor.