the source distributing.com
It was over in a few minutes, long since forgotten by many who were there, but for Bill Lupien, a brief moment of melodrama on the floor of the Pacific Exchange in Los Angeles in 1969 cracked open the door to the future.
As a respected trade specialist and chair of the Pacific's floor operations committee, Lupien was pushing to implement a new, computerized trade-execution system. It wasn't anything revolutionary, just a program to automate trade executions after deals had been struck on the floor and to cut down the daily mountain of paperwork traders faced. But these were the days before electronic trading before calculators, even. Only rocket scientists trusted computers. "It was a no-brainer," Lupien recalls. "I had no idea it would be a contentious issue."
That is, until one of the Pacific's grizzled old-time specialists trotted down to his own booth one morning carrying a pair of big cutting shears. Before a rowdy crowd of veteran traders, he clipped the computer cables and shouted, "No goddamned computer is going to commit my principal capital!" Applause and cheers broke out, and everyone glared at Lupien, the young, brash technologist traitor, outlaw.
Lupien backed down quietly in that battle and made arrangements to let the specialist go back to handling his trades manually. But he also kept the rest of the system plugged in. Eventually, Lupien won the war. A sudden spurt of market growth soon triggered widespread use of the system he had helped develop called SCOREX, the first automated trading system in the world. Millions of dollars in principal capital began streaming through those computer cables in a matter of months.
Almost 30 years later, one of high tech's most ambitious entrepreneurs is staring down another band of Luddites with a new toy in his hands, only this time the stakes are higher. Much higher. After helping to wire the Pacific Exchange during his 17-year tenure there, and leaving to join Instinet the first large-scale electronic market-access network (now owned by Reuters) Lupien and partner Terry Rickard have spent three years bunkered near Lupien's 1,000-acre ranch in Durango, Colorado, quietly creating OptiMark. If this extraordinary, supercomputer-powered buying and selling engine performs as billed, it not only might make the stock trading floor a fondly remembered museum exhibit of the 20th century but might radically reshape huge tracts of ecommerce. Boasts Lupien, "It empowers consumers in ways they haven't even imagined yet."
Lupien, now 56, believes OptiMark can automate electronic buying and selling with heretofore inconceivable efficiency and speed. Powered by patented fuzzy-logic algorithms and a supercomputing "matching engine," OptiMark plays the role of ultimate marketmaker: It allows buyers and sellers to express hypothetical trading preferences along a range of prices and volumes; conducts a search of all buyers' and sellers' interests at that instant and in 1.5 seconds returns with a mutually satisfying trade at the optimal available price and volume. "No collection of humans, I don't care how many or how smart, can do what this does," says Rickard, OptiMark's 50-year-old president and a former classified Naval intelligence engineer, who built the system. "There are just too many calculations."