A novel halophilic and metal-reducing bacterium, Orenia metallireducens strain Z6, was isolated from briny groundwater extracted from a 2.02 km-deep borehole in the Illinois Basin, IL. This organism ...shared 96% 16S rRNA gene similarity with Orenia marismortui but demonstrated physiological properties previously unknown for this genus. In addition to exhibiting a fermentative metabolism typical of the genus Orenia, strain Z6 reduces various metal oxides Fe(III), Mn(IV), Co(III), and Cr(VI), using H2 as the electron donor. Strain Z6 actively reduced ferrihydrite over broad ranges of pH (6 to 9.6), salinity (0.4 to 3.5 M NaCl), and temperature (20 to 60°C). At pH 6.5, strain Z6 also reduced more crystalline iron oxides, such as lepidocrocite (γ-FeOOH), goethite (α-FeOOH), and hematite (α-Fe2O3). Analysis of X-ray absorption fine structure (XAFS) following Fe(III) reduction by strain Z6 revealed spectra from ferrous secondary mineral phases consistent with the precipitation of vivianite Fe3(PO4)2 and siderite (FeCO3). The draft genome assembled for strain Z6 is 3.47 Mb in size and contains 3,269 protein-coding genes. Unlike the well-understood iron-reducing Shewanella and Geobacter species, this organism lacks the c-type cytochromes for typical Fe(III) reduction. Strain Z6 represents the first bacterial species in the genus Orenia (order Halanaerobiales) reported to reduce ferric iron minerals and other metal oxides. This microbe expands both the phylogenetic and physiological scopes of iron-reducing microorganisms known to inhabit the deep subsurface and suggests new mechanisms for microbial iron reduction. In conclusion, these distinctions from other Orenia spp. support the designation of strain Z6 as a new species, Orenia metallireducens sp. nov.
Reasons for the mixed reactions to today's electronic off-exchange trading systems are examined, and regulatory implications are explored. Information technology (IT) could provide more automated ...markets, which have lower costs. Yet for an electronic trading system to form a liquid and widely used market, a sufficient number of traders would need to make a transition away from established trading venues and to this alternative way of trading. This transition may not actually occur for a variety of reasons. Two tests are performed of the feasibility and the desirability of transitions to new markets. In the first test, traders in a series of economic experiments demonstrate an ability to make a transition and develop a critical mass of trading activity in a newly opened market. In the second test, simulation is used to compare the floor-based specialist auction in place in most U.S. stock exchanges today to a disintermediated alternative employing screen-based order matching. The results indicate that reducing the role of dealer-intermediaries can actually diminish important measures of market quality. Our findings suggest that the low trading volumes on many off-exchange systems do not result from traders' inability to break away from established trading floors. Rather, today's off-exchange trading systems are not uniformly superior to the trading mechanisms of traditional exchanges. Thus, regulatory actions favoring off-exchange trading systems are not warranted; but, improved designs for IT-based trading mechanisms are needed, and when these are available, they are likely to win significant trading volume from established exchanges.
Student-managed portfolios provide opportunities for real investment decision making experiences. Students function in clearly defined professional roles, gain experience, and are accountable for the ...fund's processes and decisions. The authors describe the $2 million student-managed portfolio at the University of Delaware and detail its governance processes. A student team of 45 analyzes equity investment ideas and authorizes and carries out trades. The fund's governance means its implementation of ideas is slower than it would be with a professional money manager. The authors test a hypothesis that the fund's inclusive and deliberate governance and its process of authorizing and making trades negatively impact returns in the short run. If prices move systematically during the wait between when the selection of a buying or selling opportunity and the trade, then the delayed execution could "leave money on the table." The analysis of all 61 trades made in an 18-month period ending March 31, 2017, shows that the student-managed portfolio does not miss out on short-term abnormal returns from its trade ideas. In fact, the fund's buys are marked by a -2.2% CAR in the (-10, -6) pre-trade period. The fund's governance and value orientation seem to lead to buying stocks that underperformed prior to the trade.
Many major stock exchanges rely on their member firms to act as dealer intermediaries, risking their own capital to trade as dealers with investor customers. A confluence of forces will dramatically ...alter the role of these intermediaries and the strategies available to them. Information technology is increasing the diversity of trading strategies used by investors; these impose different costs and risks upon intermediaries. Alternative electronic trading venues—off-exchange trading systems—are increasing the competition faced by established exchanges, and have been especially effective in targeting investors who impose low risks upon intermediaries. Finally, many of the automated systems developed by existing exchanges have stripped of many of the cues that have in the past been used by intermediaries to assess the riskiness of an investor's trade and to price accordingly. We believe that competitive pressure from alternative trading venues will drive exchanges to develop mechanisms to support risk-based pricing. We explore, through a stylized model of trading, how the use of risk-based pricing can preserve the established central market. This enables intermediaries to separate pricing the shares traded from pricing the services for dealing these shares, and provides low-cost execution while preserving the benefits of intermediation. Our model uses a detailed computer simulation, in which dealers interact with order flow to produce a sequence of trades, which determine market prices, which in turn influence order flow; the model enables us to calculate trading costs for different classes of investor, various other standard measures of market quality, and market maker profitability.
Financial markets perform many functions, but principal among them is to bring together buyers and sellers and to provide a mechanism for price discovery. Information technology has had a number of ...significant impacts on financial markets, enabling enormous increases in volumes and more sophisticated trading techniques, such as program trading and index arbitrage. Despite improvements, some large institutional investors identify shortcomings in today's markets that make the process of buying or selling large, block orders time-consuming and costly. To address these concerns, a new trading system, OptiMark, has been built around several innovations, including (1) a graphical user front end for depicting trading preferences, and (2) a back end built on high-performance computers that process expressions of trading interest according to a price-setting algorithm intended to achieve superior outcomes for traders. OptiMark provides a means for more cost-effective block trading and is expected to contribute to regulatory objectives. This paper details the operations of OptiMark, examines its adoption potential, and assesses the impact it may have on block trading, broker-dealer intermediaries, and the equities markets.
Information technology (IT) radically alters the cost of capturing, storing, and analyzing information, and thus dramatically alters the value of the historical data represented by a firm's detailed ...transaction records of customer interactions. Yet, information systems are seldom used to their full potential in developing flexible pricing strategies and tailored offerings for individual customers, based either on the actual cost of serving these customers or on their demonstrated preferences and requirements. This will become increasingly crucial in industries with heterogeneous customers and with costs that vary widely across customers, in order to enable flexible pricing and to provide services that are accurately targeted at the needs of specific customer segments. In addition, accurate, detailed, and robust cost-accounting systems and expertise in the interpretation of performance data will increasingly become essential for competing successfully; those firms prevented from accurate microsegmentation by corporate culture and tradition, by regulation, or by an outmoded information infrastructure will be vulnerable to newer and more nimble competitors. In particular, being the low-cost provider with economies of scale will not provide adequate defense against targeted cream-skimming by opportunistic competitors, able to offer lower prices to selected customer segments. The earliest academic papers on the strategic implications of information technology explicitly adopted a framework recommending that firms adopt a single, simple generic strategy from a small set (cost leadership, differentiation, or niche). In contrast, recent experience suggests that IT may enable firms to select from more finely tuned strategic options, and that it may require them to implement mulLiple strategies simultaneously.
New entrants in many industries are able to challenge the business of historically dominant firms. In many markets, dominant players have pursued pricing and service policies that, although once ...highly effective, now make their markets attractive targets for aggressive new entrants. The entrants' strategies rely on lower overhead costs, new technologies, alternative distribution channels, and the active targeting of profitable customers. Several factors will make it possible for entrants to attack dominant players; simplistic historical pricing mistakes or policies of promising or providing universal service will make it attractive for new entrants to attack. Restrictions on the flexibility of incumbents-both externally and internally imposed-may make it difficult for dominant players to defend themselves effectively against attack by more flexible entrants with cream-skimming strategies and newer technology. We develop a set of alternatives for incumbent firms facing increasing "contestability" in their markets and the threat of agile entrants.
Some implications of e-commerce financial services are becoming clear. The Web drives transparency and increases the information endowment of all market participants. It is harder to manipulate ...customers' behavior or to overcharge them. Transparency drives differential pricing. Not all customers can or should be charged the same prices. Transparency reduces the viability of cross-subsidies between customers or between products. The differential pricing enabled by the Web transforms distribution channels and enables direct distribution and alternative forms of distribution. Some intermediaries may be bypassed altogether, while others may rapidly lose their best, most profitable, and previously most loyal customers. Price transparency, differential pricing, and bypass will have significant strategic impacts on many if not all financial services firms. Price transparency will create acute pressure on pricing. The need for differential pricing will be even more acute in industries with strong customer differences in profitability.
PDF
