19 January 1998.

For most Americans, it's just an ordinary Monday.

The alarm clock rang several times at 7 o'clock, I woke up sleepily, washed up, ate breakfast, and set off from my home at 8 o'clock, got in the car, and headed from my home in the suburbs to Manhattan in New York, Loop in Chicago, and High Street in Boston.

This is not an ordinary Monday, and almost all financial practitioners noticed some strange phenomena immediately after the opening of the market.

"Is there a new market entrant coming in? Why is the trading volume so high, now it's eight percent higher than the same period yesterday, ah, no, it's nine percent now. ”

"What's going on? Doesn't anyone know? Who created such a large volume of volume? Merrill Lynch? Goldman Sachs? Is there a market merchant who employs 500 traders?"

"Futures volume is growing more than stocks, God, is anyone trying to buy the whole of the United States?"

"No, no, take a closer look, take a closer look, the market index does not fluctuate at all, this should be a market dealer who suddenly provides a large amount of liquidity to the exchange!"

。。。。。。

From New York, Chicago, Boston, Los Angeles。。。。。。 Even London, Xiangjiang and Tokyo, which pay attention to the U.S. stock market and futures market 24 hours a day, have discovered the changes in the trading volume of the U.S. stock market and futures market for the first time.

Ordinary traders are just curious and amazed, but the first thing that comes to mind at the helm of major consortia is fear and opportunity.

It has become abundantly clear that this must be a market player who has mastered the means to provide market liquidity quickly, and this method means wealth.

Unlike ordinary retail traders, there is almost no commission for each transaction, but the exchange will give the market dealer a certain amount of rebate for each transaction.

The market maker system is a unique system in the U.S. securities industry, which is fundamentally different from domestic market makers, and its main role is to provide liquidity for the exchange.

In the 90s, there are more than 50 designated market makers on the New York Stock Exchange alone, and these designated market makers provide the richest liquidity in the world for the New York Stock Exchange, and the New York Stock Exchange has become the world's largest securities trading market.

Liquidity is the foundation of the exchange's business, and if the exchange lacks liquidity, in some cases, those who want to sell will not be able to sell, and those who want to buy will not be able to buy.

Therefore, liquidity means the competitiveness of the exchange, and in order to attract more liquidity, the exchange will provide a certain amount of rebate to market makers or brokers, such as the New York Stock Exchange now offers a rebate of 25 cents per lot for its designated market makers.

You know, the New York Stock Exchange alone has a daily trading volume of more than $20 billion and 3 billion shares.

Each lot is 100 shares, and assuming that the market provider provides 30% of the liquidity in it, then the exchange needs to give the market manager a rebate of about $3 million per day.

Don't underestimate the $3 million, the brokers under the market maker live on commissions, and the basic salary is very low, and the gross profit of $3 million can almost reach more than 50%. Some relatively large market makers can earn tens of millions of dollars in net profits every year from exchange rebates alone.

What's more, market makers buy low and sell high, earning the difference between different exchanges, and this money is even more impressive.

And now, the major market makers suddenly found that even their best traders have no way to continue to match transactions, and any price quoted will always be preempted to conclude the transaction.

"Can any of you explain to me how this company called Cowyce steals our orders!" Merrill Lynch's securities office was slaughtered, and the company's chief financial officer, Stanley O'Neill, was staring at everyone with a serious face.

"Mr. O'Neill, we are still investigating, and we can only know that the other party should have adopted an automated trading method that we have not yet mastered, and besides, not only us, but Goldman Sachs and Morgan Stanley have also been robbed of a lot of business. Collins, the head of the securities sales department, said stiffly.

Stanley O'Neill gave Collins a stern look: "This is your reply to me? Do you think this change is not a big deal? You still have the face of TiMorgan and Goldman Sachs? In the past three years, your performance has been far behind Goldman Sachs!"

"It's just a, what's the big deal. Several employees of Merrill Lynch's business department were slandered in their hearts, but they didn't dare to show any inappropriate expressions on the surface.

"Mr. O'Neill, of course we will find out the problem, solve it, and I will report to Mr. Assad in a moment, and thank you very much for the CFO's attention to our work. "Collins is tired of this nosy black executive, you are a CFO, you always come to meddle in the business when you have nothing to do, do you really think you are already the CEO?

Stanley O'Neill is one of the few black executives on Wall Street and an inspirational example of Wall Street.

Like most blacks born in Atlanta, Stanley O'Neal was born into poverty and grew up working as an assembly line worker at General Motors. O'Neill was very motivated, and with a scholarship from GM, he earned a degree in industrial management, which later offered him a higher scholarship and recommended him to Harvard Business School.

Under the influence of the affirmative action movement, General Motors also needed to create such a black image, so in just a few years, O'Neill became a senior leader in the finance department of GM.

After GM's operations fell into crisis, O'Neill left GM and moved to Wall Street to become a small leader in Merrill Lynch's bond division. Regardless of his character, his ability is indeed quite outstanding, and within two years of joining Merrill Lynch, he became the leader of the bond guarantee department, and the bond department he led became one of the departments with the highest profit margin at Merrill Lynch. The year before last, he was promoted to CFO of Merrill Lynch Group and held great power.

Stanley O'Neill is black, and probably because of this, O'Neill's style of acting is more white than that of white people, and his style is very cold and strong, which is incompatible with the corporate culture of Merrill Lynch's "Merrill Lynch Mom", and in private, almost all employees hate this black slave descendant from the South.

"Good, good. Stanley O'Neal looked Collins up and down with a cold gaze and turned to leave.

"Cut. Collins sneered disdainfully at Stanley O'Neill's back, and his face gradually became solemn.

His heart was far from being as relaxed as it appeared.

As the head of all Merrill Lynch's traders on the New York Stock Exchange, he has been stationed on the trading floor of the New York Stock Exchange for a long time on weekdays, but today he left the busy New York Stock Exchange and returned to the headquarters building of Bank of Merrill Lynch, which shows the urgency of the form.

Throughout the morning, Merrill Lynch provided almost no liquidity to the NYSE, whether in the stock or futures markets, and almost all of its business was stolen by a small market merchant named Coyce, which is almost unique in Merrill Lynch's decades-long history.

Now it is certain that the other party has adopted computer automated trading, and the transaction speed is faster than that of any market maker!

Although the market merchant business is only a small part of Merrill Lynch's vast financial empire, it is all for Collins and his eighty traders, and their value to Merrill Lynch is only that.

Now, if things don't improve in the short term, you and your traders may not be able to keep their current jobs.

No, all the traders on Wall Street may not be able to keep their jobs!

Collins shuddered and picked up the phone, "Mr. Assad, ten thousand urgent!"

Maybe... The profession of a trader will soon disappear, right? A thought suddenly flashed through the mind of Collins, who was holding up the phone.

。。。。。。

The same conversation can be found in the headquarters of every market maker, whether it's Merrill Lynch, Goldman Sachs, Morgan Stanley, Bear Stearns, Lehman Brothers... The market and commercial departments of every investment bank have almost all handed in blank papers today.

For a while, Wall Street was turbulent, and countless people were openly and secretly probing about the background of this small company called Cowyce, and how it monopolized the liquidity and arbitrage business of the three major exchanges.

“45%。。。 46%。。。 We've pretty much pushed the envelope, and we've provided more than 45 percent of liquidity to the NYSE and Chicago Board of Trade so far today. The red dots above are the orders we lost, and the green dots are the orders we have already gained. Bellankefen pointed to the big screen in the control room and said to Zhang Chen.

Zhang Chen raised his head and stared at the big screen, where the green color had almost covered the entire screen, and there were few red dots.

A smile appeared on Zhang Chen's face, sure enough, it was too easy to make money like this, no wonder more than ten years later, even if the ban on flash trading led to a significant reduction in the profits of automatic trading, it still couldn't stop new high-frequency traders from entering this field.

It's faster than printing money!

Zhang Chen and Bellankefen's phone had been ringing countless times, and he didn't need to look to know that it was all Wall Street companies that came to inquire about the situation, and of course neither of them answered the phone. Even if it is a call from the SEC, it must wait until the end of the trading day to obtain the data of the day.

The basement three floors of the Chase Manhattan Tower have never been as full of money as they are today.

There are no shouting traders, no phone calls and pagers one after another, just the sound of the air conditioner and fan turning in the computer room and the slight clicking and ticking sound, but this is such a dark basement that is creating the greatest miracle in the history of Wall Street!

"$32.57 million!" Blankeffin shouted as the roof of his skull was shiny, "This is incredible! $32.57 million in a single day!"

It's no wonder that Blankefen is so out of shape, there is no investment bank on Wall Street that can make a profit of more than $30 million in a single day. And Cowys's current lightning trading, the investment can hardly be considered in terms of relative returns, and the gross profit can be at least more than 90%!

This means that if the form remains the same, more than 300 trading days a year, you will get close to 10 billion dollars in profits!

Zhang Chen was naturally very excited, but his mind was also very clear: "We just took the lead, and this is because there are no competitors at the moment, so we can monopolize the entire market alone." These big banks will not sit idly by, with their background, as short as a month, as long as three months, they will compete head-on with us in the market of lightning trading, and then the profits will decline rapidly, and the arms race will become more and more cruel, and then there will be a profit of six million dollars a day, which is already very good. ”

Bellankefen was also a little excited, and suddenly alerted: "Will they put pressure on the SEC or Congress to ban lightning transactions。。。。。。? ”

"No!" Zhang Chen said categorically, "as long as they are smart enough, they will not put pressure on the SEC, but will lobby the SEC to allow the exchange to access more designated market makers." ”

Blancfin was extremely smart, and with a slight turn of his mind, he reacted, "That's right, if the SEC prohibits lightning trading, they will also have no chance of making this money in the future." Now everyone has seen the benefits that the lightning exchange can create, this is a gold mine, and no mining company will lobby the government to ban mining!"

Zhang Chen nodded approvingly, and then shook his head: "However, you just said that you should be careful, and that's right." These big companies are not easy to get along with, and now that they know the value of lightning trading, the easiest way to enter this market is to poach people. We do have to be prepared for that. ”

Blancfin stared, this is indeed a big problem.

Flash trading and high-frequency trading have a much stronger demand for talent than traditional financial companies, and a core technical team of only five people may be able to create this value. For these large companies, as long as these five people are poached, they can completely copy the strategies of competitors and surpass them, and poaching is the easiest tactic to achieve the goal.

"I will make sure that the core team is stable. Bellankefen's face was serious and almost gritted his teeth, "Whoever wants to dig people has to pass me first." ”

As he spoke, Zhang Chen's phone buzzed again.

Zhang Chen picked it up and took a look, Jamie Dimon.

"Why don't you answer the phone!?" Jamie Dimon's excited voice came from the phone, "The whole Wall Street has been completely messed up, and countless people have come to ask me what the hell is going on with your Coyce! Oh my God, this is crazy, 78% of the transactions today are made by you, what the hell are you doing?"

Zhang Chen smiled slightly: "Jamie, we are making history." ”