The search for quality block liquidity continues to be critical
Ralston Roberts, global CEO of Instinet Incorporated, said it was always difficult to trade large blocks, optimize prices and minimize the risk of information leakage and negative selection, all at the same time.
“This is especially true in stocks with low liquidity or thinly traded, in event situations and in markets where liquidity builds up at certain key times of the day,” he told Traders Magazine.
On December 1, Instinet announced the Canadian launch of BlockCross, a workflow solution for managing block-of-title transactions.
Roberts said the Canadian markets have been steadily growing in volume over the past decade and more, adding that there is growing interest in the types of conditional orders in this market.
“With conditional order and blotter integration functionality, and access to unique and diverse liquidity from our agency offices and algo operations, Instinet BlockCross offers buying clients opportunities to cross liquidity. natural counterparties that the client may prefer and define order management parameters tailored to their specific trading styles and workflows, ”he said.
According to Roberts, the Canadian markets were the next logical step to launch BlockCross, following Instinet’s launch of BlockCross in the EMEA region in late 2019 and the initial acquisition of BlockCross for US equity trading in 2017. .
“After hearing from our clients who actively trade Canadian securities, we have come to believe that the trader-specific capabilities, controls and ‘customization’ made available in BlockCross would be beneficial in their pursuit of best execution,” said he declared.
In spring 2021, Instinet introduced the ability to trade conditional order types in its Canadian ATS, Instinet Canada Cross (ICX).
“We have had significant adoption by our subscribers as conditional behaviors become increasingly important for algorithmic strategies and price sensitive orders,” he said.
In fall 2021, the company introduced the ability to trade Canadian securities through its BlockCross trading desk technology and began extensive testing.
“We were very happy with the results so we officially launched the offer on December 1,” commented Roberts.
Optimizing price and size is one of the reasons the conditional order management and blotter integration technology found in BlockCross has been so beneficial for customers, according to Mark Govoni, president of Instinet and responsible for the Americas.
“By automating the integration of their interest with conditional orders, they can continue to actively work in the markets while passively researching larger blocks in BlockCross,” he said.
“This helps increase the chances of capturing unique, un-displayed liquidity in sizes larger than what may appear to be available in informed markets,” he added.
Govoni said BlockCross has the ability to source additional unique and natural liquidity from Instinet’s agency office, through the Agency IOI function of the platform.
Govoni added that since dark conditional orders are not visible before trading, traders can submit larger rest orders with reduced risks that they will signal or trigger a market move before their order is executed.
He pointed out that BlockCross offers “unique features and access to the depth of liquidity,” which creates opportunities to execute large trades efficiently and anonymously, minimizing the impact on the market.
“And clients can actively manage the counterparties they prefer to interact with – which adds yet another layer of signaling risk mitigation,” he added.
Roberts added that one of the things Instinet customers appreciate the most is that BlockCross’s proprietary blotter integration allows them to personalize interactions from their own front-end.
“The agile GUI can configure pop-up alerts, respond to natural flow, set auto-execute instructions, generate interest from preferred counterparties, and optimize blocks,” he said.
Customers can integrate with Instinet’s advanced algorithms and view real-time market analysis.
Access to BlockCross is also easy – through most OMS / EMS vendors – including Instinet’s own Newport EMS, as well as Instinet’s algorithms or FIX connections.
“We have deployed BlockCross on a market-by-market basis, so that the technology can be specifically tailored to each individual’s micro-market structure. This means BlockCross allows the customer to stay compliant with local and / or regional regulations and the market landscape, ”said Roberts.