Direct Edge Highlights Retail Flow in Market Data Deal

Direct Edge, operator of the third-largest U.S. stock exchange, entered into a distribution agreement with Interactive Data Corporation to make its EdgeBook Depth, available through IDC’s consolidated market data feed.

The move positions Direct Edge to increase the visibility and sales of its market data to a broader range of customers, and to differentiate its data as coming from retail transactions.

“We have a lot of direct subscribers to our EdgeBook product, but it’s also important to get your data out there with distribution,” said Bryan Harkins, COO of Direct Edge in an interview. “This is important to an exchange’s distribution because we can’t reach everyone on our own.” EdgeBook is a product that provides full-depth of book information from Direct Edge’s EDGA Exchange and EDGX Exchange. Both platforms are the transaction venues for more than 11 percent of U.S. cash equities trading.

While Direct Edge already provides the EdgeBook as a proprietary depth of book feed, it is adding relationships with market data distributors.

IDC is the third largest market data provider with all types of customers including traditional buy side, high frequency trading firms and broker dealers, Harkins said.

Harkins also said the EdgeBook data is unique because of the high content of retail flow executed on the two Direct Edge transaction venues. The two platforms (EDGA and EDGX) are the top exchange destinations for retail order flow from the largest discount brokerage houses, the exchange operator stated. “That is one of the things that makes it more differentiated. Other than that, the third largest market data provider is carrying our data and it is really important for our exchange and our brand,” said the COO.

“We feed our data to their product and they provide the consolidated view of the market to their customers,” said Harkins, explaining that EdgeBook would be incorporated with other exchange feeds.

The Interactive Data Consolidated Feed delivers low latency data from than 450 sources worldwide, and is used by global financial firms to power algorithmic trading and electronic trading applications. Sources include 150 exchanges, 100 contributors of OTC data, multiasset class instrument coverage and extensive Level 2 data, according to the company.

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