Agency-only broker EdgeTrade yesterday unveiled Covert, a tool for institutional traders who seek to capitalise on the benefits of sending electronic orders only to dark pools. Covert is an extension of FAN, EdgeTrade's smart order execution strategy that simultaneously sprays aggregated dark pools and public markets, and then continuously moves an order in line with shifting liquidity until best execution is fulfilled.
"What we have witnessed this year with respect to volume of executions taking place in the dark is nothing short of spectacular," comments Joseph Wald, CEO, EdgeTrade. "Traders leveraging FAN's connections to public markets and dark pools, as well as its adaptive techniques to scouting out real-time liquidity, have come to realise a new day is dawning in the world of dark pools."
In April, FAN saw an average dark execution rate of 28.9% per day, with peak days hitting as much as 66%, the firm says. Covert is for traders who desire to only interact with liquidity in the dark, particularly when the potential for negative exposure is of paramount importance, it continues.
"In the past, 'upstairs' liquidity was difficult to directly access and interaction with it was often cumbersome, not transparent and invited unwanted exposure," notes Wald. "Covert brings dark pool connectivity to the fingertips of traders and, perhaps more importantly, keeps a lid on information leakage."