Investment bank Morgan Stanley has launched NightOwl, a new algorithm that navigates select dark liquidity pools and quoted markets. The company claims the tool provides clients with access to “the most natural liquidity possible”.
NightOwl is available as a direct trading destination or indirectly through Morgan Stanley’s existing algorithmic trading offerings. The new stealth algorithm uses Morgan Stanley’s proprietary analysis of dark liquidity pools to avoid interaction with those dark pools that disclose client order information through indications of interest (IOIs). The company says this minimises information leakage in the handling of its clients’ orders.
Andrew Silverman, managing director and head of distribution at Morgan Stanley Electronic Trading, said in a statement that the bank is offering NightOwl in response to increased client concern about having their order information disclosed through IOIs. “NightOwl helps our clients achieve best execution in both quoted and dark markets while protecting their individual trading strategies,” he commented.
NightOwl is currently available to clients and takes advantage of Morgan Stanley’s recently announced reciprocal dark pool arrangements with Goldman Sachs and UBS.