Canadian alternative trading system Alpha Group intends to launch a dark trading facility in November 2010. Aimed at buy- and sell-side firms, Alpha IntraSpread is a set of orders that allows dealers to seek matches within their firm without pre-trade transparency and with guaranteed price improvement upon the national best bid and offer (NBBO) at the moment of the trade.
“We do not allow a trade to complete unless it improves on the NBBO,” said Alpha CEO Jos Schmitt, adding that the launch timetable was subject to regulatory approval.
Schmitt expects liquidity to be drawn to the new facility by a combination of client experience and low cost pricing. “In the first place we are looking at a mechanism that would support internalised trading with its key benefits being price improvement. The pool will be available at trading costs which will be substantially below any of the fees charged by any market place in Canada,” he said.
According to market data provider Thomson Reuters, Alpha currently has a 20% market share of trading in Toronto Stock Exchange-listed securities. Schmitt has said the firm aims to have 30-40% of the market by the beginning of 2012.