Our privacy policy describes how Fidessa uses cookies on our website. If you continue using our website, you are consenting to our use of cookies. OK

Welcome Back!

First day back at school today – thought it might be a good (dangerous?) idea to try and make some predictions about what we will see in the world of fragmentation through 2009.

In the six months since we have been putting the numbers together, the FFI on the FTSE 100 has risen by 0.8 on the CAC 40 and by 0.3 on the DAX indices. Applying a strictly linear extrapolation of this means that we could expect to see the FTSE 100 break through the statistically significant level of 2.0 before the end of 2009. This would imply that any trader wishing to execute an order in any FTSE 100 stock would need to visit more than just the LSE to do so. The same analysis shows the DAX and CAC 40 following closely behind with predicted year end values of 1.87 and 1.69 respectively.

I suspect that these figures will prove pretty reliable, although the real question is where the liquidity will go to. I think it’s inevitable that there will be consolidation amongst lit MTFs and, whilst at least four more are scheduled to launch this year, I doubt that there will be more than 3 significant alternative venues by year end.

The real action is likely to occur in the dark/smart space. Baikal and Arca Europe will launch before the middle of the year and I’d be surprised if Turquoise is alone amongst the existing MTFs in trying to put together a strategy around dark liquidity.

Finally, I think the interaction between the large brokers with their own dark pools will also shape liquidity significantly this year. Perhaps they may end up as the real competition to the incumbent exchanges.

Leave a comment

Copyright © 2018 Fidessa Group Holdings Limited. All rights reserved.

The information contained within this website is provided for informational purposes only. Fidessa will use reasonable care to ensure that information is accurate at the time it is made available, and for the duration that it remains on the site. The information may be changed by Fidessa at any time without notice. We also reserve the right to close the website at any time. No representation or warranty, expressed or implied, is given on behalf of Fidessa or any of its respective directors, employees, agents, or advisers as to the accuracy or completeness of the information or opinions contained herein or its suitability for any purpose and, save in the case of fraud, all liability for direct, indirect, special, consequential or other loss or damages of whatever kind that may arise from use of the website is hereby excluded to the fullest extent permitted by law. Any decisions you make based on the information in this website are your sole responsibility and information on the website should not be relied upon in connection with any investment decision.

The copyright of this website belongs to Fidessa. All other intellectual property rights are reserved.

Fragulator® is a registered trademark of Fidessa Group Holdings Limited.

Reproduction or redistribution of this information is prohibited except with written permission from Fidessa.