Neovest, a trading technology and direct market access provider, now connects to 15 ‘dark pools’ of liquidity, trading networks that do not publish quotes on the open market. Neovest, which is owned by JPMorgan, has recently launched an active trading tool that simultaneously disseminates orders to numerous ‘dark pool’ destinations, the firm says.
Some dark pools require connectivity through their proprietary front-end, which means a trader may have to use multiple front-ends if he wishes to work a large-sized trade. According to Carl Carrie, head of electronic products, JPMorgan, this can be highly inefficient. “Neovest has become the ultimate search engine for liquidity, quietly becoming the only front-end system the buy-side needs. For the first time, on one platform, traders can quickly access both traditional electronic networks and dark pools,” says Carrie.
A recent study by market research firm TABB Group, suggests that dark pool execution volumes will continue to grow. According to the report, crossing networks and dark pools represented approximately 10% of the equity market at the end of 2006. Using the total number of destinations referenced by TABB Group, Neovest supports direct routing to approximately 90% of dark pool liquidity, according to the firm.
In a separate report, TABB Group reported that in 2006 the average number of front-end trading systems on the desk of a buy-side trader was 6.3. A major initiative for institutions, it noted, is to reduce that number in coming years. “Neovest is a perfect platform to consolidate front-end efficiency and reduce costs,” says Bryce Byers, CEO, Neovest. “We foresaw that the trading business would continuously gravitate towards a transparent, broker-neutral platform with access to all pools of liquidity, which is what we deliver.”