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What is Market Structure?

Kind and distribution of participants in a market, size, market Structure means the number, in general terms. Traders and investors alike react to market structure, reg NMS electronic equity markets, in today's global.

On it goes. . . Crossing platforms, structured products (trading strategies designed to maximize returns and minimize risk by capitalizing on market-structure change), algorithms, fundamental and quantitative investors alike regulate capital with programs. Results? Quantitative trading has become popular and successful because it manages risk through mathematical analysis of market structure.

While the practice of trading in pursuit of alpha (divergences from norms) and beta (the degree of divergence) is the prevalent form of "investing" today in the equity markets, here's the cold truth: the act of investing is increasingly the domain of private equity.

Morgan Stanley, millenco (hedge fund Millennium Capital) and BATS Trading move billions of shares per month - often more than the global market's biggest equity program trader, citadel Derivatives, renaissance Technologies, high-frequency firms like Octeg (the equity trading arm of Getco LLC). Trades on what remains of the floor of the NYSE are driven by mathematics and execute in 200 milliseconds or less. Are essentially ECNs, having absorbed Archipelago and Instinet (and BRUT), consider: The Nasdaq and the NYSE.

Any wonder why? And Fidelity is among the largest algorithmic traders. Grew revenues 52% in 2006 to $38 billion and had an all-time investment-bank high net income of $9.5 billion (after paying out $16.5 billion in bonuses) principally on the strength of trading operations, now the world's largest hedge fund, goldman Sachs, plus.

You're the only participant in your own market who doesn't, if you don't. You gotta know your equity market structure. You're ill-equipped for Reg NMS markets, if you're still practicing investor relations the same old way, so IROs.

And why should I care?

Less functional relevance, net effect: Reduced value at the management table. Ineffective measurement of your IR program. Wasted time on outreach and messages inappropriate for your market structure. Inaccurate answers about why your equity appreciates or declines. Risks? You're neglecting a key facet of what drives your external target market's decisions, measurement - without considering market structure, outreach, shareholder-base goals, if you conduct your Investor Relations program - messaging.

You must cozy up to market structure and make it your friend, if you - and your management team - want to navigate today's equity market with calm confidence. The Street isn't what it used to be, iROs. Then adapt by learning the new key value drivers embodied in market structure. Or accept that the short-term nature of today's equity markets is at odds with altruism. So go private. That's why they're pumping literally trillions into private equity. . . Investors will always follow the cash. " Okay. "But we focus on the business and let the stock take care of itself.