Bank of America Merrill Lynch has launched new functionality within its US alternative trading system (ATS), Instinct X, that aims to offer the buy-side greater block trading opportunities.
The new tool, called Instinct Natural, lets the buy-side interact with liquidity from private and institutional clients that resides within the investment bank.
Buy-side traders can use Instinct Natural to rest conditional orders within the Instinct X ATS and wait for a natural match to their order.
Clients can access Instinct Natural through BAML algorithms directly via a FIX connection or through sales traders. The functionality will not be available through clients’ order management systems.
According to BAML, the longer clients are willing to rest orders via Instinct Natural, the more likely they will find natural crosses with price and size improvement, while limiting market impact.
“We want to make it easier for our clients to find liquidity so we’ve built a central platform where natural flow can interact,” said Jason D. Crosby, global head of portfolio sales and head of Americas institutional execution services sales. “With Instinct Natural, clients can tap the vast, uncorrelated, natural order flow that comes through our firm. We expect this will quickly become the place to go for size and price improvement.”