In recent years, block trading has enjoyed continued growth, due in part to new platforms in the market that are challenging the status quo. While electronic block trading platforms made up just over 1% of the trading volume in the U.S. equities markets in 2003, it represented 4.5% in Q2 2007.
A new Impact Note from Aite Group, LLC examines the latest trends in the electronic block trading market and profiles some of the leading players in the marketplace. It also considers future prospects for the overall electronic block trading market and provides key market share figures.
According to the report, "Block Trading: BIDS Ups the Ante," electronic block trading has become increasingly competitive over the last 12 months, with new platforms entering the market to challenge the incumbents. Among the trends emerging are open approach platforms that allow buy-side and sell-side order flows to interact, the acceptance of algorithmic orders, the introduction of products designed to increase fill-rates of client orders, the globalization of block trading platforms, and the introduction of additional filters to create a customizable user experience.
"In the past year, the electronic block trading market has undergone substantial changes with new products, services and market entrants," says Sang Lee, managing partner at Aite Group and author of this report. "With the launch of BIDS, price compression appears inevitable and, within two months of existence, the block trading utility has already shown signs of challenging the status quo. BIDS has upped the ante in the block trading market, and it will be up to the rest of the market participants to come up with innovative and bold responses or risk being left behind the competitive curve."
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