Pipeline Trading Systems LLC said it has deployed Liquidity Builder, a new service that monitors liquidity across multiple cash equity and options markets, and then aggregates the small order liquidity into Pipeline –qualified large blocks. The small order liquidity is offered at the NBBO in Pipeline-sized blocks of the underlying equity security.
Available to the buy-side as an opt-in feature, Pipeline said this is the first multi-asset liquidity aggregation system for buy-side equity traders. The new service is being offered in conjunction with an affiliate of Pipeline Trading Systems LLC, which was set up specifically to experiment with technology for accessing and aggregating liquidity across multiple markets. The Pipeline affiliate packages small order liquidity into single, 10,000, 25,000, 100,000, and 250,000 shares blocks of the underlying equity security.
"Institutional traders are always looking for more block liquidity. As high-frequency trading increases, and the options markets become more automated, we want to be able to tap this liquidity when it can help us reduce transaction costs for our investors," commented Dennis Fox, of Munder Capital Management, in the release. "Pipeline's new Liquidity Builder helps us access that liquidity on our terms: the liquidity is brought to me and I can choose to react to it or decline if the timing/price is not right," stated Fox. According to Fred Federspiel, CEO of Pipeline, in the release, "With this new service, we can now help our institutional customers uncover fragmented liquidity across multiple cash equity and options markets that can be aggregated into large blocks and immediately captured at the NBBO. Our experience interacting with high frequency trading in the Algorithm Switching Engine and our acquisition of 3D Markets' assets have made this service possible. We're uncovering a treasure trove of information behind the fire hose of quote and trade data, in both equity options and the underlying assets."
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio