Neonet CEO Simon Nathanson believes the firm’s new consolidated order book is a key tool in achieving best execution.
Neonet’s consolidated European order book offering allows its clients to look at prices for stocks from its 31 global exchange memberships simultaneously. Prices from clients’ own exchange connections can also be combined on to the same screen.
Buy-side firms have recently called for a consolidated tape in Europe. In the US, a consolidated tape provides price and volume data on all securities listed on the exchanges registered with the Securities and Exchange Commission, regardless of where a trade takes place. However, Europe has no such initiative for a central source of market data following the introduction of alternative execution venues.
According to Neonet, bringing relevant high-speed market data into one consolidated order book will create a more transparent view of European trading.
Orders to the consolidated book can be directed via Neonet’s smart order router (SOR). There are also several settings that allow traders to tailor the front end of the order book according to their own preference.
“The idea is that everyone can view prices of stocks and see all the different markets on which they are offered together on one screen,” Nathanson told theTRADEnews.com. “After gathering and evaluating all the data, our SOR will then ensure you get the best price.”
The product will also allow clients to set parameters that can tailor a trade to their own specifications. “If you use the SOR as it is, you can make sure you are getting the best price on any market at that given point,” said Nathanson. “But with this order book, you can incorporate your own knowledge of the markets to change the weighting of your order. Sometimes you need to consider historical data of exchanges or the likelihood of getting your order filled, for example.”
The new product has been developed using Neonet’s experience with multiple trading venues in the US and through trading on Chi-X in Europe. Nathanson also revealed that there would be no premium for Neonet’s clients wishing to use the service.