Question-and-Answer Session
Operator
Thank you. (Operator instructions) We’ll hear first from Rich Repetto with Sandler O'Neill.
Rich Repetto – Sandler O'Neill
Good evening, Thomas and Paul.
Paul Brody
Hi, Rich.
Thomas Peterffy
Good evening.
Rich Repetto – Sandler O'Neill
I guess the first question is on this -- the October 1 rule change with these customers -- where you'll be more in parity with the customers. And I guess the question is, is there any way that you could give us a feel for the magnitude, where they’re in front of you, or how it could improve your trading?
Thomas Peterffy
Well, you see, it’s a complicated situation here, because to tell you frankly, I don’t quite see how this rule is going to be enforced. The ISC says don’t worry about it, we’ll deal with it; but when I really ask what do you do about a broker that, for example, does not monitor how frequently his customer trades. You see, what the rule says is that any customer who puts in more than 349 orders in the preceding quarter is classified as a professional. This then is predicated on the broker counting every customer’s order. Now, many of these brokers do not have very good technology. As a matter of fact, most brokers -- most options brokers use a very few routing brokers such as ourselves or Goldman or Citadel. And so I don’t quite know how this counting is going to be done, and even if it’s done, I don’t quite know what to do about the customer that say, we counted to become a professional trader and then he goes from us to some other broker and that other broker has no reason to know what the frequency of his trading. So -- I don’t know how it will be enforced. That’s my problem with it.
Rich Repetto – Sandler O'Neill
I got it. So there is more aspects to this than -- there is a lot of -- there is different aspects to it, different impacts.
Thomas Peterffy
That’s right.
Rich Repetto – Sandler O'Neill
Okay. And then the next question I guess is for Paul. Just on -- you might have said this and I missed it, but the corporate segment, the net revenues were negative $7.2 million that looks a little bit more than what it -- we've been running [ph] in the past. And again, I may have missed it, I apologize if I did.
- To read the full transcript on Seeking Alpha, click here »
