Global agency brokerage Instinet has added dark order types for trading Japanese equities on its CBX ASIA trading venue.
CBX ASIA members now have access to hidden and iceberg orders for trading Japanese stocks on the platform. The new strategies will also have the ability to interact with existing displayed order types, but interaction will take place on a strict price/time priority basis, with lit liquidity given preference over dark orders at any price level.
Before the addition of the new order types, CBX ASIA, which also trades Hong Kong-listed stocks, was a fully displayed trading venue.
Joel Hurewitz, head of Asia-Pacific sales – broker dealer and liquidity at Instinet, said that the addition of the new order types is expected to result in an increase in overall liquidity and the average trade size executed on CBX ASIA.
“Eventually, clients will also have the ability to tag orders or portions of orders that they'd like to expose to buy-side-only execution venues via [Instinet's execution management system] Newport 3's blotter interaction technology,” he added.
To cater for the addition of dark order types, orders matched in CBX ASIA will be routed to the stock's primary listing market for execution. Trades executed on the Tokyo Stock Exchange will be reported via its ToSTNet network, while trades completed on the Osaka Stock Exchange will be reported on its J-NET network. Matched orders will not be confirmed trades until they are successfully reported, which can take up to two seconds.
“As trades are matched, Instinet can optionally provide messaging back to a client's smart order router or algorithmic trading system indicating that an ”approved cross' from ToSTNeT or J-NET is forthcoming, allowing automated trading systems to more efficiently manage their exposed orders,” added Hurewitz. “This effectively solves the multi-second latency issue of reporting off-exchange trades to ToSTNeT or J-NET while providing a high-speed continuous trading environment.”
The new order types will be made available by direct FIX connectivity to CBX ASIA, either via third-party connectivity providers or Nighthawk, the broker's dark liquidity aggregation algorithm.