Although going live only five months ago, IEX, the first equity trading venue owned by buy side investors, has been able to quickly attract a trader following. Marketed as being able to prevent abuse from high frequency traders, the IEX has been assisted by the recent publishing of Michael Lewis’s new book Flash Boys, which revealed holes in exchanges that high frequency trading profited from. So far in April, volumes have risen to over 20 million shares traded daily during the month, surpassing several long established equity venues.
Initial firms to partner with IEX have been institutional brokers connecting their traders to the venue. With volumes rising, this month has seen the entrance of retail brokers connecting to the platform. Earlier this month, both Tradestation and InteractiveBrokers announced their plans to connect to IEX. According to representatives of IEX, both firms have finished testing, with live order routing available from Tradestation to IEX, and will be shortly provided by IB.
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Also announcing connectivity today, and the first primarily European firm is Saxo Bank. According to the broker, via their institutional trading relationships they are now providing direct order routing to IEX for both CFD and cash shares. The first live trades were placed yesterday, with the availability to route trades to the IEX opened to all customers today whose accounts are enabled for “advanced orders/algo orders”.
Commenting on the news, Claus Nielsen, Head of Markets at Saxo Bank stated in the firm’s prepared remarks that “Saxo Bank has for some time been including IEX in our SOR venue selection. Yesterday, Saxo Bank took a next step and introduced a direct route to IEX as we believe in providing our clients with the ability to make choices themselves, choices they believe in and choices that will, hopefully, optimise their trading opportunities.”
“Saxo Bank has developed a leading multi-asset trading platform which is changing the way institutions interact with their clients and the way professional investors trade. Led by our strong technology heritage, we believe that technology brings about more efficient markets but also more complex. In this environment, not only regulators, but also exchanges, brokers and investors will need to continuously evolve to understand and navigate this complexity. The addition of IEX to our platform ensures that we can offer our clients the widest access to global exchange and trading venues, including dark pools.”