Fidelity mixes retail and institutional flow in new dark pool

Fidelity Capital Markets, the institutional trading and execution division of Fidelity Investments, has launched a new US dark pool incorporating retail liquidity.

Fidelity Capital Markets, the institutional trading and execution division of Fidelity Investments, has launched a new US dark pool incorporating retail liquidity.

Block Liquidity Opportunity Cross, or BLOX, is an extension of the firm’s existing alternative trading system CrossStream and is available to both institutional investors and retail firms.

Executions in BLOX will occur at the mid-point and the dark pool is accessible through functionality that lets investors increase exposure and block interaction via a conditional order type.

According to Fidelity, its retail brokerage trades account for an average of 535 million shares per day, with 34% of the NMS shares traded considered block size, i.e. either 10,000 shares per order or valued at US$200,000 or more.

As well as offering institutional investors access to this flow, retail traders will be able to interact with buy-side liquidity that offers price improvement for their orders.

Fidelity will also operate a selection policy that determines the types of firms that are allowed access to BLOX, to safeguard the integrity of the venue.

“In today’s competitive trading environment, fundamental investors are looking for a venue to conduct secure and fair transactions, while also achieving price and size improvement,” said John Donahue, senior vice president, head of equity trading at Fidelity Capital Markets. “Additionally, many of our institutional clients have been asking for improved workflow for conditional interaction. BLOX supports that functionality, and is yet another example of how we are continuously innovating to improve our clients’ trading experience.”

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