Thanks to the Xmas elves at Fidessa Labs working overtime, we now include coverage of the FTSE 250 which many of you have requested via email. Having had a quick look this morning it’s interesting to see that Chi-X is making a big dent in the 250 (as well as the FTSE 100) and that, whilst their numbers are relatively low, BATS and Nasdaq OMX are beating Turquoise into 4th spot on FTSE 250 stocks. Turquoise on the other hand seems to be keeping its gains made recently in FTSE 100 stocks.
Looking at the FTSE 250 data today provides another reminder of one of the central themes of this blog – that MTFs need to compete through specialisation not price wars. These ideas are developed further in the excellent Crossing the Chasm series of books by Geoffrey A. Moore which have been required texts for all of us here at Fidessa Towers this year. There are a lot of firms with deep pockets backing the MTF community and so being cheaper looks like a long and very expensive strategy. Differentiation, on the other hand, has been the way forward for many successful technology companies which, by the way, is the business that the MTFs are in. In fact, I was chatting yesterday about this with the CEO of an MTF who said that each venue needs to develop its own “personality”. This will then help the trading community know where to direct different types of flow. Anyway, I promise I won’t bring this point up again but I suspect that once these personalities have emerged we will all have a much clearer understanding of fragmentation.