French broking house CA Cheuvreux is planning to finalise the roll-out of its Blink internal crossing engine for European equities by the end of Q2, following its launch at the beginning of this year.
“Blink has been live in a fairly limited environment, but we are extending it regularly,” Philippe Guillot, global head of trading and execution at Cheuvreux, told theTRADEnews.com. “We are adding customers, markets and securities. It is really about expanding the breadth and depth of liquidity coming into the engine.”
Blink crosses child-level orders from a variety of order flow types coming into Cheuvreux. This includes retail and institutional buy-side, sell-side, algorithmic, program trading and direct market access flow.
Orders entering Blink are duplicated and sent on to displayed exchanges. If an order crosses with another order in Blink, the system either cancels or revises the order in the lit venue to account for the amount matched internally.
There are no resident orders in the system and it does not form prices. Orders are executed at the European best bid and offer (EBBO). The crossing and matching technology underpinning Blink is trading technology provider Smart Trade’s LiquidityCrosser.
According to Guillot, Blink gives Cheuvreux’s buy-side clients additional crossing opportunities and helps reduce the footprint of their orders in the market. “If you are on the order book, you may be number 15 in the queue and not able to cross, but you will be able to cross within Blink,” he said. “As a result, the market impact of your order is reduced because it does not appear as a transaction on a visible order book.”
When Blink fills orders, it does not wait to receive confirmation of cancellation of the duplicate order on the relevant lit venue. Instead it sends out the cancellation instructions to the venue and trade confirmation to the client simultaneously. “This means that the client doesn’t lose any valuable microseconds by crossing in Blink,” said Guillot.
This introduces the risk of double fills, which Cheuvreux will bear on behalf of the client. However, Guillot adds, “We consider the risk of a double fill to be negligible because the technology built by SmartTrade is very quick and efficient.”