Wedbush to Offer Free Trading Software

Wedbush Morgan Securities, a Los Angeles-based brokerage and investment bank, is trying to capitalize on the growth of the $500-billion hedge fund industry.

Wedbush plans to roll out trading software called the Maximus Trading System in early October. The free product is designed for hedge fund managers and professional traders who need instant access to market centers such as the New York Stock Exchange and the Archipelago electronic trading network, as well as other features such as news alerts and quick trade confirmation, said Harvey Cloyd, Wedbush’s manager of professional trading solutions.

Maximus, which is being aimed primarily at hedge funds with $10 million or less in assets, will compete with platforms such as Townsend Analytics’ RealTick and SLK’s REDIPlus, Cloyd said. About 1,000 of the 6,000 hedge funds in the U.S. are in the target market, and according to some estimates there are as many as 30,000 professional and “semi-pro” traders.

Cloyd said Wedbush’s system is being promoted as easy to use and customize. Cloyd said a trader could set up advanced trade “scripting,” for example, meaning that he might receive an alert to buy 100 shares of IBM Corp. only if the Dow Jones industrial average is up at least 20 points on the day on heavy trading volume and Cisco Systems Inc. has reached a new high.

By enhancing its technology, Wedbush hopes to boost its share of the trade clearing business, where market leaders include Goldman Sachs Group Inc.’s Spear Leeds & Kellogg and Bear Stearns Cos. Currently, 30 to 40 hedge funds use Wedbush for clearing and other services, Cloyd said.

Trade clearing, or the process of transferring money and securities between buyer and seller, generates commissions averaging less than a penny a share, Cloyd said, but it can be a high-volume business.

-- Josh Friedman