But the firm's technology proved indestructible, and despite a depleted sales force, Cantor's publicly traded ESpeed spin-off extended its electronic trading platform into international government securities, commodities markets and, earlier this year, foreign exchange. Now ESpeed is shifting into a higher gear.

Howard Lutnick, CEO of both Cantor and ESpeed, revealed in a November 12 earnings call that ESpeed would begin handling mortgage-backed securities and interest rate swaps by this month. No surprise there; Lutnick had been telegraphing those plans for a while. But he dropped a bombshell on unsuspecting analysts and institutional traders: ESpeed is also entering the equities markets, offering liquidity-seeking and price-improvement tools that will compete with Instinet Group and other e-trading venues.

"The field is already crowded," notes Larry Tabb, president and CEO of capital markets technology consultancy Tabb Group. "Can ESpeed's order-matching and block-trading capabilities be that much better than others'?"

Lutnick believes that what distinguishes ESpeed is its "leveraged model" -- the ability to layer one more asset class on "a built-and-paid-for matching engine and network connecting to most large banks and investment banks." As ESpeed, which has 700 client institutions, takes on other high-tech trading shops, like Charles Schwab Capital Markets and Investment Technology Group, "our incremental costs to enter the market are minimal," Lutnick asserts. "We can become the low-cost provider."