Goldman Sachs named best broker

The company used sophisticated technology and in-house trades to get the best prices for its clients, analysts say.

By Kim Peterson Jan 29, 2010 1:10PM
Goldman Sachs (GS) has booted JPMorgan Chase (JPM) out of the top spot as the company that got the best prices for its institutional clients, according to Bloomberg.

Goldman was able to get the average price of a trade closest to the stock level when the order was received, Bloomberg reported. JPMorgan fell to No. 4.

And during the time of Goldman's rise, stock volatility quadrupled from its average. More than 10 billion shares were traded on U.S. exchanges every day. And high-speed trading rose to account for 61% of U.S. stock market activity, according to Bloomberg.

Coincidence?

Analysts say that Goldman came out on top because it has the most sophisticated electronic trading systems out there. "They can get some of the fastest execution times on trades, thereby minimizing some potential costs," one analyst told Bloomberg.

Brokers have become adept at using technology to shave fractions of seconds off of trades, hoping for a tiny advantage over rivals.

Goldman also says it can match buy and sell orders under its own roof. That way, it can keep the lid on what its trades look like.

Bank of America (BAC) took second place in the survey -- largely because it acquired trading powerhouse Merrill Lynch last January. Morgan Stanley was third, and fourth place was a tie between Barclays and JPMorgan.

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