Euronext has launched its Auction Volume Discovery (AVD) order type for equities, as part of the firm’s effort to unlock additional liquidity for clients during auction periods.
The new offering, first announced in May this year, will allow participants using the AVD to make use of the auction imbalance and access unique trading opportunities around opening and closing auctions.
Specifically, the launch follows an increase in client demand for new ways to interact with liquidity at auctions.
Nicolas Rivard, global head of cash equity and data services at Euronext, said: “The launch of the AVD order type for equities is an important milestone in our Innovate for Growth 2027 strategic plan for cash trading.
“This new solution underlines our commitment to expand trading opportunities for our clients while enhancing liquidity across our European markets.”
Euronext’s AVD orders are to set to function by allowing participants to submit non-displayed orders throughout the trading day, which will then trade at the official opening or closing auction price.
Following this, the service will capture the auction imbalance after the regular auction process has taken place, and any remaining AVD orders will execute against other orders, while any unexecuted will expire as each respective auction finishes.
As a result, the offering aims to ensure that the auction’s price determination process does not change, and information leakage does not occur.
Euronext’s launch of its AVD offering follows an uptick in AVD-related plans by other firms in recent months.
In November, LSEG announced that it would upgrade its after-market trading session, Closing Price Crossing (CPX) to include iceberg and hidden orders post-close, scheduled to go live on 8 December.
Similarly, in April 2023, SIX Swiss Exchange unveiled its AVD functionality built of the firm’s dark pool, SwissAtMid, to provide asset managers with the option to execute orders without being visible to the wider market, as exclusively revealed by The TRADE at the time.