Media Room


Trader VIP Clubs, ‘Ping Pools’ Take Dark Trades to New Level

First came dark pools, private trading venues that challenged old-school stock exchanges.

Now something else lingers in the shadows of Wall Street: ping pools.

They also operate outside traditional stock exchanges, but these venues, which are gaining users in changing markets, are more opaque for the public. Running them allows some of the fastest, savviest electronic traders to dodge exchange fees and reap plum opportunities.

Source: BloombergDate: Tuesday, January 16, 2018


No Idea What MiFID Stands For? Here’s What You Need to Know

3) Will the industry keep trading in the dark anyway?

The short answer: yes. There are two key ways trading will still take place beyond the public gaze for orders that are too small for dark pools but too big to risk placing on a stock exchange:

The most contentious is called a systematic internalizer. It’s the new name that banks and trading firms will go by when they fill their clients’ buy or sell orders directly using their own capital. 

Public exchanges and some other trading venues will also hold periodic auctions which hide the order size for a stock until sufficient volume has been accumulated to trigger a sale.

"We are likely to see a distinct drop in dark trading once the caps are in force," said Anish Puaar, European market structure analyst at Rosenblatt Securities. "Ultimately most of the trading will move to periodic auctions and eventually systematic internalizers. Some volume may shift to the SIs on day one, but many buy-side firms are still getting to grips with how they work."

Source: Bloomberg/NewsroomDate: Tuesday, January 02, 2018


How high-frequency trading hit a speed bump

Falling volume means fewer chances to trade, while low volatility allows less money to be made on each transaction. “For these businesses to make money, they need raw materials,” says Vikas Shah, an investment banker at Rosenblatt Securities. “The raw materials are volumes and volatility.” When Virtu went public in 2015 — the Flash Boys uproar having delayed its initial public offering by a year — the company’s annual revenue hit $714.5m. Last year it was expected to total just over $500m, according to S&P Capital IQ, even after it acquired fellow HFT pioneer KCG Holdings in a $1.4bn deal.

Source: Financial TimesDate: Tuesday, January 02, 2018