Agency broker and technology provider ITG has started offering Posit Alert for Australia, Hong Kong and Japan equities trading, with a view to helping improve access to liquidity in the region.
The tool notifies buy-side firms of uncommitted orders – those that have not been sent to the market – on other buy-side firms’ trade blotters. Posit Alert runs alongside ITG’s existing Posit Marketplace dark aggregator, which helps re-assemble smaller orders already out in the market.
ITG has installed Posit Alert with a number of clients in the region, says Michael Corcoran, Asia-Pacific head of sales and trading at ITG in Hong Kong. It is initially available to existing clients using ITG’s Triton execution management system both in Asia and globally.
Domestic Asian and Asia-based firms are increasingly using dark liquidity, he notes. “The growth of Posit Marketplace underscores this growth of adoption of dark liquidity tools locally, as well as by international firms trading into Asia,” Corcoran tells AsianInvestor. "We would expect to see the same clients interested in Posit Alert as the next step in the liquidity story.”
Combining the liquidity trading in dark order books in small, algorithmic-sized volume with the latent liquidity on buy-side blotters offers the maximum chance of finding trade matches, he adds.
In addition, “ITG’s product crosses at the mid-point, with no need for negotiation, which simplifies the traders’ workflow and is an important element of the client feedback we have received,” says Corcoran.
Buy-side clients across Europe and North America are already using the system, which has been available in its current format in those markets since 2008.
In the US, the average order size in Posit Alert (33,000 shares) is more than 100 times the size of the average order on US exchanges (300 shares). “In the testing phase in Asia-Pacific, we have seen a similar or greater order of magnitude in many of the crosses for the Asia-Pacific markets,” says Corcoran.
The product operates in broadly the same way in Asia as elsewhere, although there are some local market structure rules around the reporting of the trades, notes Corcoran. For example, in Asia, all Posit Alert crosses will be reported via the local stock exchanges, whereas in other markets there may be alternative trade reporting venues.
Posit Alert buy-side block crossing is now available in 26 countries worldwide.