* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download what is the “upstairs market?” the causes of market impact for block
Survey
Document related concepts
Investment fund wikipedia , lookup
Currency intervention wikipedia , lookup
Short (finance) wikipedia , lookup
Hedge (finance) wikipedia , lookup
Foreign exchange market wikipedia , lookup
Stock market wikipedia , lookup
Private equity secondary market wikipedia , lookup
Futures exchange wikipedia , lookup
High-frequency trading wikipedia , lookup
Market sentiment wikipedia , lookup
Efficient-market hypothesis wikipedia , lookup
Algorithmic trading wikipedia , lookup
Trading room wikipedia , lookup
Transcript
WHAT IS THE “UPSTAIRS MARKET?” The upstairs market is a network of broker trading desks and institutional investors where block trades are matched. Unlike trades that are paired at an exchange (or ATS), these trades are typically negotiated via phone. Once a trade has been consummated it is “printed” on a marketplace. In order for brokers to source liquidity for their clients’ trades, they distribute details of those orders via phone calls and electronic indications of interest. THE CAUSES OF MARKET IMPACT FOR BLOCK TRADES There are four main causes of market impact that institutions should be concerned about: Information leakage from brokers or other market participants using indications of interest, phone calls, and other communications Posting oversized orders as a form of advertisement for a broker Block traders sweeping the market to put up a print outside of the current protected spread. Brokers aggressively working orders to seek liquidity causing the price move against you. 80% 70% 60% 50% 40% 30% 20% 10% 0% NEW YORK • LONDON • HONG KONG • SINGAPORE • SYDNEY • TOKYO • TORONTO © 2015 Liquidnet Canada Inc. Member of IIROC and a member of the Canadian Investor Protection Fund. ON A DIFFERENT SCALE