Mostly… fixed income and cross product eTrading

January 5, 2007

Exchange / OTC Markets

Filed under: etrading, Mifid — holky @ 2:32 pm

With many new trading venues coming thanks to MiFID – such as Project Turquoise (bank-led consortium), Chi-X (from instinet),  Equiduct (was Easdaq), and many dark pools of liquidity that have been in the news through second half of 06, doesn’t this fragmentation of liquidity take an exchange market participant’s architecture closer to what we already see in OTC markets? — where the direct participants need access to as many liquidity pools as possible in order to get a chance of doing the trade they want to do?

With an argument of using electronic access to markets to more easily aggregate a view of fragmented liquidity within the decision-making process, and automated ability to route orders to the right place at the right time to get the best result, how many bright minds are working out cross-asset (or perhaps “asset-neutral”) etrading initiatives to capitalise on this?

P.S. interesting that at this point the exchanges (Eurex, OMX, NSX, Euronext, Direct Edge, BATS – not an exhaustive list just what came to mind) have been in the news regarding reduction of their fees, but the OTC platforms/venues aren’t [at least publicly] doing the same.




  1. Hmmmmm, these “consortiums” are less about efficency & aggregating liquidity pools (obviously) and more about wrestling power from Exchamges & ECN’s etc.

    Not saying that this will not eventually lead to more efficent markets, nor that it is a bad thing. It really depends on your perspective. For cricket fans out there, the upheaval of World Series Cricket, whilst disruptive at the time, certainly made the game far better.

    Had to slip cricket in there, somewhere, on this great Ashes day. : )

    Comment by waratah — January 5, 2007 @ 4:24 pm

  2. […] compares to a $0.003 per-share rebate in January, which the fast-growing electronic communications network (ECN) coupled with a $0.002 per-share fee […]

    Pingback by BATS inverts fees again « Mostly… — August 24, 2007 @ 7:12 pm

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