Liquidnet, the so-called dark-pool network provider, has set a new trading record in Australia during May, making more than $1 billion in member trades.

The head of Liquidnet Australia, James Chatfield says the average size of trades has continued to increase, climbing beyond the $1.6 million mark in May.

After four years of operation in the Australian market, Liquidnet has more than 48 asset managers as members and can provide a pool of $2.2 billion in average daily liquidity, according to Chatfield.

Average daily liquidity is up 16 per cent compared to the first quarter of the year.

Liquidnet’s technology sweeps the order management systems of its asset-management customers, putting their orders into an anonymous or dark pool, where they can be matched with similar orders. To be a Liquidnet customer, an asset manager must have more than $200 million under management.

Chatfield points to the launch of rival bourse Chi-X at the end of October as providing a major boost to the Liquidnet trading platform.

Since Chi-X’s entry into the Australian market, Chatfield says daily trading volumes are up about 80 per cent compared to the previous eight months.

“We have had a good run, but it is fair to say that we are not resting on our laurels,” Chatfield says.

“It is still a fairly challenging environment out there.”

The record in May is the second time this year that Liquidnet has achieved more than $1 billion in trades, with monthly trades reaching similar levels in February.

Chatfield puts the increase down to a number of factors, including a push by clients to use dark pools to trade big name companies that are typically seen as being more liquid.

In May the dark pool covered 468 companies, with 93 of these traded over the month.

Liquidnet claims that it now provides 54 per cent of the average daily volume of the respective companies traded on a particular day.

 

2 comments on “Dark pool breaks $1 billion”
  1. Avatar Angry Trader

    ….I don’t know how any fundy that takes execution seriously (and it’s impact on returns) cannot have darkpools (whether on not Liquidnet) in their armoury. The obliteration of the lit pools by the HFT’s have destroyed confidence in true price discovery in those venues, and while the ASX (et al) continue to live in denial (by saying they add liquidity, whereas they don’t do anything to add to true liquidity) more and more flow will be diverted to Dark Pools… Well Done Liquidnet.

  2. Avatar Angry Trader

    ….I don’t know how any fundy that takes execution seriously (and it’s impact on returns) cannot have darkpools (whether on not Liquidnet) in their armoury. The obliteration of the lit pools by the HFT’s have destroyed confidence in true price discovery in those venues, and while the ASX (et al) continue to live in denial (by saying they add liquidity, whereas they don’t do anything to add to true liquidity) more and more flow will be diverted to Dark Pools… Well Done Liquidnet.

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