At first blush, Merrill Lynch & Co.'s June 6 deal for market maker Herzog, Heine, Geduld Inc. seems a puzzling acquisition. After all, three years ago Merrill shrank its own trade-execution businesses by pruning the number of equities in which it makes markets, and selling off specialty units. And the old-school business of professional market making in stocks is being threatened by electronic communications networks, or ECNs, that allow investors to trade directly with one another.
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