The Tradetech Daily

Barclays Capital

Barclays Capital

Electronic Sales TradingEmail: LXdesk@barclayscapital.comTel: +1 212 526 1130

Barclays Capital''s LX Liquidity Cross centralises liquidity from various sources to maximise crossing for clients. LX is a top-three broker-dealer dark pool in the US and differentiates itself by actively profiling order flow to limit toxicity. Clients can control which flow types to interact with, based on reports made available to them.

Functionality and order types

LX is a non-display limit order book sorted on a price-tier-time basis, with no indications of interest or orders being routed out of the dark pool. Barclays Capital”s institutional clients have the highest priority in the US. LX supports all standard order types and parameters.

Access and participation

Barclays Capital analyses all members to make sure they are providing quality liquidity. LX is accessible via the firm”s trading strategies, including the BARX Hydra dark aggregator and dynamic router. In the US, LX is available for direct connectivity via a sub-millisecond FIX gateway. In the US, over 50 direct participants are active with 550+ clients accessing LX daily. LX was launched in Europe in early 2011. Around 40% of participants are BarCap”s electronic trading clients, 35% are internal trading desks – including its NYSE designated market making business – and the remaining 25% are broker-dealers.

Instruments traded

LX offers trading in all Reg NMS equities in the US and approximately 1,000 pan- European equities. The average trade size is around 300 shares, with around 135 million shares (double counted) traded daily.

Order protection

As well as anti-gaming logic, the LX Service Team analyses execution patterns for signs of market manipulation. They profile activity based on key metrics, e.g. short-term alpha, order size and duration, and execution relative to NBBO, or PBBO in Europe.

Connectivity/sharing agreements

In the US, Barclays Capital has liquidity-sharing arrangements with UBS, Credit Suisse, ITG, Citadel, Knight and Getco. Typical agreements include bi-directional access for dark liquidity aggregators, smart order routers, and high-frequency trading strategies.