BATS Trading, the US-based alternative trading system, has added dark pool Knight Link as a destination for its Dark Scan order type.
Dark Scan routes orders to BATS’ dark liquidity partners and is designed to pass price improvement and lower access fees to users. Knight Link is an off-exchange liquidity source operated by Knight Equity Markets, a unit of Knight Capital, which offers trade execution in more than 7,300 US securities.
According to BATS, any remaining shares can be matched in around 400-500 microseconds at US$ 0.0025 per share on the BATS book.
”BATS subscribers can now benefit from higher fulfillment rates in difficult-to-trade names, as over 50% of Knight Link’s volume is made up of companies with US$2 billion or less in market cap,” said Jamil Nazarali, managing director and head of broker-dealer electronic trading, Knight Equity
Markets. “We look forward to providing this new source of off-exchange liquidity, as well as quality trade executions.”
Dark Scan will require anywhere from 5 to 50 milliseconds for potential fills by dark liquidity partners before the order is sent back to the BATS book to fill any remaining shares. If there is liquidity on the BATS book that offers price-improvement relative to the NBBO (National Best Bid and Offer), those orders will be accessed before routing to dark liquidity providers.