Too early to tell?

Even if you’re not directly interested in antipodean fragmentation, Australia will provide a particularly pure data set for what is fast becoming a global phenomenon. This is because (right now at least) there is only one primary and one alternative venue. It’s too early to draw any meaningful conclusions but, as the charts below show, Chi-X Australia seems to have made a more positive start than its counterpart in Japan. This is shown by the fact that Chi-X Japan took almost six months to achieve the same share of trading volume captured by Chi-X Australia in its first two weeks of operation. Then again, Chi-X Japan faced a more complicated clearing and settlement situation and had to contend with a short selling ban, too.

It’s also interesting to note that average trade size for Chi-X Australia is around one third of the market average. Is this indicative of greater HFT activity? And, if so, will this mean greater volumes for all concerned, or is it just more noise for the buy-side to contend with (one of the great unintended consequences of the pro-competition regulations in the US and Europe)?

Whatever happens, Australia will take its own path and I am sure that other alternative market operators will be studying its progress with interest.