US electronic trading venues improved their share of trading in NYSE-listed securities in the third quarter of 2008, according to research and advisory firm Celent, at the expense of exchange specialists.
A new report, ‘Execution quality in the NYSE market’, found that electronic order books, such as Direct Edge, Nasdaq’s own market centre and BATS Exchange, have increased their market share in NYSE stocks to more than 40%, compared to 25% the last time the report was conducted, which covered the four months leading up to March 2008. NYSE exchange specialists experienced a fall in market share from 65.6% to 44.4% during the same period.
From all the market centres analysed, BATS Exchange, which has recently gained exchange status, ranked first in terms of speed, while BIDS Trading retained its leading position for price performance. The study also noted that frequency of price improvement has increased across all market types since the last report.
Knight Capital Group ranked highest in both speed and price among the major market makers category, while Nasdaq market centre delivered the best price among the major US electronic order books.
The analysis was based on 179 market participants covering more than 18.8 billion orders for over 7 trillion shares from July to the end of September.