It used to be that large prime brokers provided one-stop shopping for small to mid-size hedge funds, registered investment advisers, professional traders and asset managers, but that source of services has largely disappeared. Sensing an opportunity, TradeStation Securities, Inc., a leading electronic brokerage firm for active, professional and certain buy-side institutional traders, today announced the launch of its new TradeStation Prime Services division. TradeStation Prime Services will seek to fill the gap for quality prime brokerage services which are no longer being provided by the larger firms that traditionally served this market segment.
The new division intends to provide a valuable combination of industry-leading execution platforms, including the award-winning TradeStation, reliable clearance and settlement of trades, and first-class service and support, including start-up assistance, outsourced/direct access trading, real-time risk management, portfolio reporting, securities lending, CSA, and capital introductions for its clients. The new division expects to have its first accounts up and running next month.
Also, as the new division grows, TradeStation plans to make valuable enhancements to the TradeStation trading platform that it believes will attract clients to use TradeStation’s trading platform. TradeStation Prime Services plans to serve traders of equities, equity and index options, futures, non-US equities, and forex, making it a powerful solution for institutional traders who seek to trade in any of, or across, those asset classes. TradeStation Securities currently offers the clearing and custody services of J.P. Morgan Clearing Corp. (for equities and options) and R.J. O’Brien & Associates LLC (for futures).
TradeStation Prime Services will be co-headed by Lance Baraker and William Katts, as senior managing directors, both of whom have significant experience running prime services operations in New York. Mr. Baraker and Mr. Katts will run the division from a new TradeStation office in mid-town Manhattan, and will seek to take advantage of TradeStation’s office presences in South Florida, Chicago, Richardson/Dallas, and London to attract new clients. TradeStation will also now have a full membership and direct access operation on the floor of the New York Stock Exchange to accommodate clients who make some of their trades on the NYSE floor.
“We believe that our award-winning trading platform technology, ability to provide custody and clearing, and the strength of our balance sheet will give us a strong offering to the small- to mid-sized hedge funds and investment advisers who need services no longer being provided by the larger firms,” said Salomon Sredni, CEO of TradeStation Group, in a company release.
“This is a market opportunity for TradeStation that did not really exist until recently, and we look forward to maximizing the value we believe we can create by entering this segment of the institutional trader space.”
“We are extremely excited about joining TradeStation,” added Baraker. “The downfall of many financial firms in 2008 has created a rare opportunity for another custodian to enter and succeed in the prime brokerage market. William and I look forward to combining our experience and relationships built over the years with TradeStation’s industry-leading technology to create a leading, powerful prime brokerage platform for the buy-side institutional trader.”
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