The proportion of dark trading in Europe increased slightly in September despite continued high levels of volatility, according to the latest figures from Thomson Reuters Equity Market Share Reporter.
Dark trading totalled €23.96 billion last month, accounting for 2.66% of overall European turnover, compared to 2.39% in August.
Volatility, as measured by the VSTOXX index, which uses EURO STOXX 50 options prices to gauge volatility, remained high in September, reaching a peak of 53.55 on 12 September, even greater than August's high of 49.5.
While market uncertainty is generally thought to reduce appetite for dark trading, because of fears that investors might receive a price away from prevailing market levels, September's figures suggest a willingness to seek opportunities for price improvement in non-displayed volumes.
The biggest winner among European dark pools was UBS MTF, which became the second largest non-displayed multilateral trading facility having only been launched by the Swiss bank in November last year.
UBS MTF traded €4.05 billion in September, accounting for 16.92% of overall dark value traded, behind Chi-X Europe's Chi-Delta, which traded €5.62 billion, or 23.48% market share.
This puts UBS MTF ahead of the non-displayed venue operated by Turquoise, the MTF majority-owned by the London Stock Exchange (LSE), which dropped out of the top two dark pools for the first time since June 2010.
Last month's dark trading rise came amid a 26.8% slump in overall European equity trading volumes, from €1.14 trillion in August to €899 billion in September as investors settled after the turbulent conditions experienced in August.
The three largest domestic stock exchanges – the LSE, Deutsche Börse and NYSE Euronext, which operates bourses in Amsterdam, Brussels, Paris and Lisbon –collectively accounted for 40.5% market share (€364.27 billion), compared to 41.6% (€475.03 billion) in August.
In contrast, volumes traded on displayed MTFs remained stable, with alternative venues accounting for 30.4% market share (€273.5 billion) of overall trading in September, compared to 30.3% (€346.5 billion) in August.