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It's getting harder to tell old Wall Street and new Wall Street apart.

The melding of the two continued Wednesday when Michael Molnar,

Salomon Smith Barney's

high-profile head of global retail sales and trading, joined

, the upstart daytrading company that recently took up with after-hours trading network


. (Daytraders are retail investors who use sophisticated software and technology to buy and sell stocks very quickly.)

Molnar will run Securities

, the online trading unit the company started in December. His task: use his more than 11 years and many connections on Wall Street to attract top-tier and midlevel institutions like hedge funds, as well as broker-dealers, to Tradescape's technology to route orders.

His pitch: Tradescape's system looks for the best price on one of the stock exchanges or trading systems, including its own electronic communications network, MarketXT, for a low cost. If the firm decides to apply to turn MarketXT into a full-fledged stock exchange -- which the company is considering -- then the whole thing gets cheaper still.

Tradescape agreed to buy MarketXT earlier this year, and Tradescape's largest investor,


, agreed to invest $100 million in the struggling marketplace. (Softbank has invested in

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, publisher of this Web site.)

As Tradescape seeks to build out its trading business, it starts to look a little less like the kind of daytrading firm that has drawn criticism from regulators. Regulators are worried that daytrading firms don't make customers aware of the risks, and lawmakers have fretted that high commissions offset trading gains. Both also are worried about these traders' use of margin, or loans, to trade stocks.

But now there are questions about whether the daytrading unit will even remain an integral part of CEO Omar Amanat says the company is considering spinning off the


daytrading unit. "From a structural standpoint we are always looking for ways to optimize our own infrastructure," Amanat says. "We are considering doing all sorts of things right now."

Also, the company will essentially try to move upstream with its online trading business, Amanat says, by trying to attract the likes of Solly and other sell-side institutions before moving on to the buy side.

"What I perceive here is an incredible opportunity to shape and be part of a revolution in the capital markets," Molnar says.

Of course, those same Wall Street firms are increasing their own efforts in the electronic-trading arena. From

Goldman Sachs

(GS) - Get Goldman Sachs Group, Inc. Report


J.P. Morgan

(JPM) - Get JPMorgan Chase & Co. Report

, they're working on plans to become more electronic. But given their size and client base, many of these institutions have been slower to create and implement new technology. Hence the executive jumping, well, downstream.

Molnar, who had been a


regular, isn't the first established player to take the leap from Solly or another mainline Wall Street firm to an upstart.

Online investment bank

Wit Capital's


Robert Lessin and Mark Loehr were once working under that same


(C) - Get Citigroup Inc. Report

roof. (Citigroup owns Salomon Smith Barney.)

For one thing, the rewards can be large. Analyst Jonathan Cohen got a $5 million signing bonus to join Wit from

Merrill Lynch


, according to

Securities and Exchange Commission


For the firms, there's the experience factor. "Most of these technology companies have been built by entrepreneurs," says one online securities analyst. "They need management."

Molnar, however, is one of the first to join a company that has its roots in a part of the daytrading industry once scorned and vilified by the mainstream. But once again, the lines are blurring. It was only two months ago that discount and online king

Charles Schwab


gave black sheep


a healthy dose of credibility by agreeing to buy the daytrading firm for over $400 million in stock.

With changes like these going on, it's likely there'll soon be just one Wall Street again.