Investment Technology Group
The POSIT dark pool suite – first launched in 1987 – provides anonymous matching of non-displayed equity orders to minimize market impact and provide opportunities for price improvement within the national best bid and offer. The POSIT suite comprises an alternative trading system (ATS) and POSIT Alert, an indications matching system that notifies interested parties of potential matching opportunities in POSIT ATS.
Functionality and order types
POSIT supports various order types including day, immediate-or-cancel, peg orders and minimum quantity. ITG employs pro-rata matching logic.
Access and participation
ITG is highly selective with counterparties that are given access to POSIT and the firm actively monitors performance during the day and on a post-trade basis. POSIT can be accessed by ITG clients via its algorithms and front end products (Triton and Radical). Direct access through FIX is also provided to clients on a selective basis. ITG has a stringent process to evaluate clients, which includes analysing the nature of order flow and various risk checks. All buy-side orders sent to ITG are exposed to POSIT unless specified.
POSIT currently supports equities and covers markets in the US, Canada, Europe and Asia. According to ITG, POSIT is especially valuable for trading large blocks and difficult-to-trade illiquid names. The average executed trade size in POSIT Alert was 39,000 shares in Q1 2011. POSIT had average daily volume of 84 million shares in Q1 2011.
ITG continuously monitors and evaluates order flow for toxicity, gaming and pinging behaviours. It uses automated tools to avoid gaming behaviour. ITG closely monitors various execution quality parameters to evaluate the impact of each participant and POSIT operations are monitored to respond swiftly to undesired behaviour.
POSIT does not have any liquidity sharing arrangements with other dark pools. ITG does offer POSIT Marketplace, which combines the traditional buy-side block liquidity of the POSIT suite with other ATSs.