NYFIX detects shift in dark pool usage
NYFIX Millennium, the US dark liquidity venue, claims its record trading day last week is proof that firms are becoming more comfortable routing orders to dark pools.
Millennium matched 110 million shares across 3,126 symbols last Thursday, almost double the average daily volume it recorded in July.
According to Brian Carr, CEO, NYFIX Millennium, this is particularly significant because during times of high market volatility, firms would tend to favour displayed markets over dark pools.
“When we see events like those of last week, traders usually want to get in and out of a position quickly, rather than reduce market impact,” Carr told theTRADEnews.com. “We believe we saw a slight change in that trend, due to firms having more order types interacting in dark pools.”
Previously, Carr argued, traders would use dark pools more passively, but he claimed that now, Millennium is programmed into traders’ routing strategies, enabling it benefit from high-volume trading days.
“The dark pool is now seen as a great place to find liquidity no matter what your strategy – reducing market impact is never a bad thing” said Carr. “This continuing shift is down to evolving tools and updated trading strategies and order types.”