What you needed this past year versus 2007 and early 2008 was lots of tools, technology and the use of gray matter. Brokers needed to bring their A game.

—Peter Weiler, EVP of global sales at Abel/Noser Corp. Abel/Noser is a broker that also analyzes trading costs. While Goldman rose to number one in the most recent ranking, JPMorgan has dropped precipitously to number four worldwide since being the top-ranked broker in 12-month period ending March 31, 2008. In addition, Ancerno Ltd announced that Goldman replaced JPMorgan as the firm that consistently got it’s institutional clients the best prices between July 1, 2008 and June 30, 2009. Morgan Stanley followed BofA in the overall ranking, coming in third, and Jason Crosby, head of Morgan Stanley’s Americas Portfolio distribution, emphasized the network effects at play in electronic trading: “The liquidity we’re able to find leads to significant opportunities to match customers’ orders against each other.”

They have the most developed and advanced electronic systems. They can get some of the fastest execution times on trades, thereby minimizing some potential costs.

—Roger Freeman, analyst at Barclays, commenting on Goldman’s electronic trading capabilities and growing advantage via network externalities. Paul Russo, Goldman’s head of U.S. equities trading and co-head of global equity derivatives, would attribute this to their ability to cross-trades through natural flows, which minimize the trading footprint they leave in the marketplace. This is a similar phenomenon to what Larry Fink suggested Blackrock might do within their own assets through BlackRock Solutions – crossing trades.