BTIG is entering the wholesaling business.
The agency brokerage has installed Chris Cappillo, most recently with Domestic Securities, as head of its newly formed broker-dealer sales operation. The unit will make markets in over-the-counter securities and exchange-traded funds. The goal is to eventually trade 5,000 securities.
“We plan to start out slowly,” Cappillo told Traders Magazine. “We’re not in a rush. We’re starting to pick up customers here and there.” As a wholesaler, Cappillo’s group will target retail brokerages for order flow.
So far, the new broker-dealer division has only two employees: Cappillo and an associate from Domestic Securities, Terri DeLouisa. Cappillo plans to hire others but is focused on setting up a trading system. The unit will use the Fidessa order management system.
As for trading, Cappillo will leverage an existing three-man distressed securities desk at BTIG. Overall, BTIG has more than 400 employees. And although the firm is primarily an agency brokerage, it does commit capital if need be. The new trading operation will commit capital, according to Cappillo.
BTIG’s bread and butter is trading larger names for institutional investors. It does little in OTC stocks. Still, Cappillo sees synergies between his group and mainstream BTIG. “We could get involved with a name that catches the eye of an institution,” Cappillo said. “They might have an interest in the stock, but before we wouldn’t have gotten the call on it.”
Cappillo spent much of his career at Spear, Leeds & Kellogg, a well-known wholesaler before it was acquired by Goldman Sachs in 2000. Spear, Leeds was co-run by Steve Starker, who is a co-founder and co-head of BTIG. “I’ve known Steve for a long time,” Cappillo said. “We worked together for 20 years.” Cappillo started with Spear, Leeds in 1982.
